CYCLICAL COMOVEMENTS IN INDUSTRIAL LABOR AND PRODUCT MARKETS: THEORY AND EVIDENCE

Economic Inquiry - Tập 35 Số 4 - Trang 725-744 - 1997
Magda Kandil1, Jeffrey G. Woods2
1University of Wisconsin‐ Milwaukee, Phone 1–414‐229‐6146, Fax 1–414‐229‐3860,
2Concord College, Athens, West Virginia, Phone 1–304‐384‐5244, Fax 1–304‐384‐9044,

Tóm tắt

We establish the theoretical connection between industrial labor and product markets within the contractual wage‐rigidity new Keynesian explanation of business cycles. We estimate time‐series and cross‐sectional regressions for 28 private two‐digit (S.I.C.) industries and find: (i) greater uncertainty is associated with upward flexibility of the nominal wage and moderates the countercyclical response of the real wage to aggregate demand shocks; (ii) an upwardly rigid nominal wage response to energy price shocks reduces the real contractionary effects of these shocks; (Hi) downwardly inflexible nominal wages are associated with downwardly rigid prices in response to productivity shocks.

Từ khóa


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