Nominal Wage Rigidity and the Rate of Inflation

Stephen Nickell and Glenda Quintini ()

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Using the accurate and extensive data available in the UK New Earnings Survey, this paper investigates the extent to which nominal wages are downwardly rigid and whether such rigidity interferes with necessary real wage adjustments when inflation is low. Despite the substantial numbers of individuals whose nominal wages fall from one year to the next, we find that if long-run inflation is one percent higher, the number of individuals with negative real pay growth increases by around 1.4 percent. This is controlling for the median and dispersion of the real wage change distribution.

Keywords: Inflation; Wage Rigidity (search for similar items in EconPapers)
JEL-codes: E24 E31 (search for similar items in EconPapers)
Date: 2001-04
References: View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/DP0489.pdf (application/pdf)

Related works:
Journal Article: Nominal wage rigidity and the rate of inflation (2003)
Working Paper: Nominal wage rigidity and the rate of inflation (2001)
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:cep:cepdps:dp0489

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().