Modelling Wages and Prices in Australia

Gunnar Bårdsen, Stan Hurn and Zoë McHugh
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Zoë McHugh: Tactical Global Management Ltd, Brisbane

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: Empirical models of Australian wages and prices are either single equation, equilibrium correction models or structural VAR models. Both theory and empirical evidence from other countries, however, suggests that wages and prices are jointly determined. Consequently, this paper estimates a simultaneous equation model of wages and prices for Australia, underpinned by a competing claims framework of imperfect competition. Two separate cointegrating relationships for wages and prices are identfied by imposing the economic hypotheses implied by the theory. The steady-state relationships for wages and prices are then embedded in a parsimonious, dynamic wage-price model.

Keywords: wage and price; cointegration; dynamic modelling; partial systems, structural break (search for similar items in EconPapers)
JEL-codes: C53 E52 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2001-11-22, Revised 2005-09-30
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Modelling Wages and Prices in Australia (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:1202

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