EconPapers    
Economics at your fingertips  
 

Early Contract Renegotiation: An Analysis of US Labor Contracts, 1970-1995

Robert Rich () and Joseph Tracy ()

Journal of Labor Economics, 2013, vol. 31, issue 4, 825 - 842

Abstract: This article examines the ex post flexibility of US labor contracts during the 1970-95 period by investigating whether unanticipated changes in inflation increase the likelihood of a contract being renegotiated prior to its expiration. We find empirical support for this hypothesis. Specifically, our results indicate that renegotiations are triggered principally by large and infrequent price shocks of either sign. When combined with evidence that ex ante contract durations are shorter during episodes of increased inflation uncertainty, our results suggest that these contracts are flexible both ex ante and ex post to changes in the evolution of inflation.

Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.1086/669965 (application/pdf)
http://dx.doi.org/10.1086/669965 (text/html)
Access to the online full text or PDF requires a subscription.

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:ucp:jlabec:doi:10.1086/669965

Access Statistics for this article

More articles in Journal of Labor Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().

 
Page updated 2019-11-13
Handle: RePEc:ucp:jlabec:doi:10.1086/669965