Are Wages Forward Looking?

Reza Moghadam and Simon Wren-Lewis

Oxford Economic Papers, 1994, vol. 46, issue 3, 403-24

Abstract: This paper presents a study of U.K. earnings over the period 1967-87 aimed at establishing whether wagesetters anticipate future movements in prices. Two models are proposed: the first where agents form rational predictions about future price movements and the second where they use simple rules-of-thumb based on past price movements. These two dynamic models, based on the same long-run equation, are compared, drawing on the methods of D. F. Hendry. Copyright 1994 by Royal Economic Society.

Date: 1994
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Working Paper: ARE WAGES FORWARD LOOKING? (1990)
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