Real Wages over the Business Cycle:OECD Evidence from the Time and Frequency Domains

We study differences in the adjustment of aggregate real wages in the manufacturing sectorover the business cycle across OECD countries, combining results from different data anddynamic methods. Summary measures of cyclicality show genuine cross-countryheterogeneity even after controlling for the impact of data and methods. We find that moreopen economies and countries with stronger unions tend to have less pro-cyclical (or morecounter-cyclical) wages. We also find a positive correlation between the cyclicality of realwages and employment, suggesting that policy complementarities may influence theadjustment of both quantities and prices in the labour market...