Real Wage Rigidity and the Effect of an Oil Discovery

Charles Bean

Oxford Economic Papers, 1988, vol. 40, issue 3, 451-62

Abstract: This paper analyzes the macroeconomic impact of an oil discovery wh en there is sluggish adjustment of real rather than nominal wages. A recession (boom) will occur if the share of nontradable employment in total employment is s mall (large), if the share of nontradable consumption in total consumption is large (small) , and if the elasticity of nontradable employment, with respect to wages, is small (large) relative to that of employment in the tradables sector. The effect of the oil discovery on wage pressure is also shown to be crucial in determining the likelihood of a recession. Copyright 1988 by Royal Economic Society.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://links.jstor.org/sici?sici=0030-7653%2819880 ... 0.CO%3B2-A&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:40:y:1988:i:3:p:451-62

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Oxford Economic Papers is currently edited by James Forder and Francis J. Teal

More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().