Resource title

Real and nominal wage adjustment in open economies

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Resource description

How are wages set in an open economy? What role is played by demand pressure, international competition, and structural factors in the labour market? How important is nominal wage rigidity and exchange rate policy for the evolution of real wages and competitiveness? To answer these questions, we formulate a theoretical model of wage bargaining in an open economy and use it to derive a simple wage equation where all parameters have clear economic interpretations. We estimate the wage equation on data for aggregate manufacturing wages in Denmark, Finland, Norway, and Sweden from the mid 1960s to the mid 1990s.

Resource author

Anders Forslund, Nils Gottfries, Andreas Westermark

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Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/19113

Resource license

Adapt according to the presented license agreement and reference the original author.