Monetary Growth and Financial Sector Wages

Michael Curran (), Matthew Fagerstrom () and Ryan Zalla ()
Additional contact information
Matthew Fagerstrom: Department of Economics, Villanova School of Business, Villanova University, https://www.linkedin.com/in/matthew-fagerstrom-733114121
Ryan Zalla: Economics Department, University of Pennsylvania, 133 South 36th Street, Philadelphia, PA 19104, USA., https://economics.sas.upenn.edu/people/ryan-zalla

No 55, Villanova School of Business Department of Economics and Statistics Working Paper Series from Villanova School of Business Department of Economics and Statistics

Abstract: We investigate the relation between monetary growth and compensation in the financial industry since the end of the Bretton Woods system. Estimating local projections, we find that the growth of the monetary base positively associates with a higher differential between financial and average wages. Our findings indicate that the effects are short lived, lending support to the temporary non-neutrality of money argued by David Hume and against the more permanent non-neutrality argued by Richard Cantillon. Our results help clarify debates on the non-neutrality of money going back to the eighteenth century. [This is the updated version of Working Paper #41.]

Keywords: Cantillon Effect; Inequality; Money Non-neutrality; Financial Industry (search for similar items in EconPapers)
JEL-codes: D31 E31 E52 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-fdg, nep-his and nep-mon
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Related works:
Working Paper: Monetary Growth and Financial Sector Wages (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:vil:papers:55

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