Causes of Wage Increases in Swedish Manufacturing. A Remarkable Case of Regular Behaviour

The present study is a theoretical and empirical investigation into the aggregate wage dynamics of Swedish manufacturing. It contains three essential results: <p> •a rigorous search theoretical model of the wage behaviour of firms is presented and adapted for application to aggregate data <p> •the implications of the model are confirmed by Swedish data for manufacturing industry and a stable wage drift equation is demonstrated to have existed since the mid-sixties <p> •the model is consistent with the findings of earlier postwar empirical research on wage drift in Sweden and provides them with a more satisfactory theoretical interpretation.