Why Does the Cyclical Behavior of Real Wages Change Over Time?

The cyclical behavior of real wages has evolved from mildly countercyclical during the interwar period to modestly procyclical in the postwar era. This paper presents a general-equilibrium business-cycle model that helps explain the evolution. In the model, changes in the real wage cyclicality arise from interactions between nominal wage and price rigidities and an evolving input-output structure.

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Year of publication:	2004
Authors:	Huang, Kevin X.D. ; Liu, Zheng ; Phaneuf, Louis
Published in:	American Economic Review. - American Economic Association - AEA. - Vol. 94.2004, 4, p. 836-856
Publisher:	American Economic Association - AEA

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Extent:	application/pdf
Type of publication:	Article
Notes:	DOI: 10.1257/0002828042002552
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005233513