Real and Nominal Wage Rigidities and the Rate of Inflation: Evidence from West German Micro Data

Details

Serval ID
serval:BIB_C18637D01FBA
Type
Article: article from journal or magazin.
Collection
Publications
Title
Real and Nominal Wage Rigidities and the Rate of Inflation: Evidence from West German Micro Data
Journal
Economic Journal
Author(s)
Bauer T., Bonin H., Goette L., Sunde U.
ISSN
0013-0133
Publication state
Published
Issued date
2007
Peer-reviewed
Oui
Volume
117
Number
524
Pages
F508 - F529
Language
english
Abstract
This article examines real and nominal wage rigidities in West Germany. Using regionally disaggregated register data for 1975-2001, we estimate the extent of both types of wage rigidities from the observed distribution of individual wage changes, taking into account possible measurement error. The fraction of workers facing wage increases that are caused by nominal and particularly real wage rigidity is substantial. The extent of real rigidity rises with inflation and falls with regional unemployment, whereas the opposite holds for nominal rigidity. Overall, the incidence of wage rigidity, which accelerates unemployment growth, is most likely minimised in a moderate inflation environment.
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Create date
10/08/2009 12:59
Last modification date
20/08/2019 15:36
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