Australian Wage and Price Inflation: 1971-1994

Lynne Cockerell and Bill Russell ()
Additional contact information
Lynne Cockerell: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: This paper estimates an imperfect competition model of price and wage adjustment for Australia. The results suggest the Australian economy can be characterised as one where firms are trying to achieve their desired long-run income share while workers are primarily concerned with maintaining their real wage. The estimation of the price-wage model is complicated by two problems; namely the substantial and persistent changes in income shares and the changing means in the inflation series over the sample. The first problem was overcome by extending the estimation period to include the wage shocks in the early 1970s which allows the income shares to be characterised as stationary. The second problem was addressed by imposing a restriction to the wage equation. This allowed a range of possible steady state inflation rates in the model over the estimated sample.

Date: 1995-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://www.rba.gov.au/publications/rdp/1995/pdf/rdp9509.pdf (application/pdf)

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:rba:rbardp:rdp9509

Access Statistics for this paper

More papers in RBA Research Discussion Papers from Reserve Bank of Australia Contact information at EDIRC.
Bibliographic data for series maintained by Paula Drew ().