The Slope of the U.S. Nominal Treasury Yield Curve Unemployment and Stability of Wage Determination: United States versus New York State

Jonathan Ohm, John Okpara and Martina Vidovic

New York Economic Review, 2010, vol. 41, issue 1, 3-13

Abstract: We find the Phillips-type model performs well in explaining wage adjustment for US non-farm business, US manufacturing, and NY manufacturing sector, showing a typical adjustment to price inflation expectation and labor market tightness. While the basic wage model shows evidence of a structural shift for the post-1991 period, this is not evident in the adjusted models for both US non-farm business and NY manufacturing, implying that the observed structural shift for the post-1991 period is likely to be the result of model mis-, or under-specification. The effect of the fraction of unemployment due to permanent job loss on wage inflation appears to be manufacturing-specific, while a smaller adjustment to price inflation expectation appears to be state-specific. On the other hand, the significant effect of the percent of adults unemployed appears to be a national phenomenon.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:nye:nyervw:v:41:y:2010:i:1:p:3-13

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