Why Does the Cyclical Behavior of Real Wages Change Over Time?
- (pp. 836-856)
AbstractThe 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.
CitationHuang, Kevin, X.D., Zheng Liu, and Louis Phaneuf. 2004. "Why Does the Cyclical Behavior of Real Wages Change Over Time?" American Economic Review, 94 (4): 836-856. DOI: 10.1257/0002828042002552
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital
- E32 Business Fluctuations; Cycles
- E52 Monetary Policy