Nominal Wage (nominal + wage)

Distribution by Scientific Domains


Selected Abstracts


The Interaction between the Central Bank and a Single Monopoly Union Revisited: Does Greater Monetary Policy Uncertainty Reduce Nominal Wages?

ECONOMIC NOTES, Issue 3 2007
Luigi Bonatti
Previous papers modelling the interaction between the central bank and a single monopoly union demonstrated that greater monetary policy uncertainty reduces the union's nominal wage. This paper shows that this result does not hold in general, since it depends on peculiar specifications of the union's objective function. In particular, I show that greater monetary policy uncertainty raises the nominal wage whenever union members tend to be more sensitive to the risk of getting low real wages than to the risk of remaining unemployed. This conclusion appears consistent with the evidence showing that greater monetary authority's transparency reduces average inflation. [source]


The Backward,Bending Phillips Curve And The Minimum Unemployment Rate Of Inflation: Wage Adjustment With Opportunistic Firms

THE MANCHESTER SCHOOL, Issue 1 2003
Thomas I. PalleyArticle first published online: 12 FEB 200
This paper presents a theory of the backward,bending Phillips curve. There is aminimum unemployment rate of inflation which offers a policy alternative to the non,accelerating inflation rate of unemployment. Nominal wages are downwardly rigid because workers oppose cuts initiated from within the employment relation. Instead, workers may acceptreal wage adjustments effected by increases in the general price level, a variableoutside individual firms' control. This is why inflation ,greases'labor market adjustment. However, workers resist too rapid a real wage adjustment,and too high an inflation generates wage resistance that cancels the grease effect and increases unemployment. [source]


The Interaction between the Central Bank and a Single Monopoly Union Revisited: Does Greater Monetary Policy Uncertainty Reduce Nominal Wages?

ECONOMIC NOTES, Issue 3 2007
Luigi Bonatti
Previous papers modelling the interaction between the central bank and a single monopoly union demonstrated that greater monetary policy uncertainty reduces the union's nominal wage. This paper shows that this result does not hold in general, since it depends on peculiar specifications of the union's objective function. In particular, I show that greater monetary policy uncertainty raises the nominal wage whenever union members tend to be more sensitive to the risk of getting low real wages than to the risk of remaining unemployed. This conclusion appears consistent with the evidence showing that greater monetary authority's transparency reduces average inflation. [source]


Nominal Wage Flexibility and Economic Performance: Evidence and Implications Across Industrial Countries

BULLETIN OF ECONOMIC RESEARCH, Issue 1 2006
Magda Kandil
Abstract By considering the theoretical connection between labour and product markets, the paper evaluates the economic relationship of these markets within the contractual wage rigidity New Keynesian explanation of business cycles. The empirical analysis focuses on the short-run cyclical behaviour of real output, prices and wages for 19 industrial countries. Time-series and cross-sectional regressions are estimated. Cross-sectional cyclical correlations in the labour and goods markets are also evaluated across countries. Consistent with the theoretical predictions, aggregate uncertainty is an important factor in increasing the flexibility of the nominal wage in response to aggregate demand shocks. Wage flexibility accelerates price inflation and moderates the response of real output growth to aggregate demand shocks. Wage flexibility does not appear to be an important factor in differentiating the real and inflationary effects of energy price shocks across countries. Finally, aggregate uncertainty increases the responsiveness of output and price to productivity shocks. [source]


Monetary Policy, Agency Costs and Output Dynamics

GERMAN ECONOMIC REVIEW, Issue 3 2003
Ludger Linnemann
Interest rate policy; financial accelerator; sticky prices and wages Abstract. This paper examines the role of financial market imperfections for output reactions to nominal interest rate shocks. Empirical evidence shows a hump-shaped impulse response function of output and suggests that credit supply co-moves with output. A monetary business cycle model with staggered price setting is presented where the firms' outlays for capital and labor must be covered by the sum of net worth of entrepreneurs and loans in the form of debt contracts. These properties are shown to generate a hump-shaped impulse response of output, which takes on the smooth and persistent appearance of the empirical output response when nominal wages are set in a staggered way, too. [source]


The Industrial Tribunals and Wage Determination in the Australian Iron and Steel Industry, 1921,38

AUSTRALIAN ECONOMIC HISTORY REVIEW, Issue 3 2000
Malcolm Abbott
It is believed in some quarters that the system of federal and state industrial tribunals in Australia has exercised a considerable impact on the determination of wages in Australia, making the average level of nominal wages more inflexible and wage differentials more equal in the interwar period. The purpose of this paper is to identify, through cross-country comparisons, the impact that the industrial tribunals had on the iron and steel industry labour market, an industry that played a crucial role in Australia's industrial development during the 1920s and 1930s. [source]