Nominal Wage Rigidity and Industry Characteristics in the Downturns of 1893, 1929, and 1981

Hanes, Christopher

doi:10.1257/aer.90.5.1432

Cited by 43 publications

(35 citation statements)

References 14 publications

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“…68 Careful studies have documented such wage stickiness in Australia, Canada, Germany, Japan, Mexico, New Zealand, 69 The following studies have all found significant signs of nominal wage rigidity: by Bewley (1999), Card and Hyslop (1997), Kahn (1997), Lebow, Saks and Wilson (1999), and Altonji and Devereux (1999) for the United States, by Fortin (1996) for Canada, by Cassino (1995) and Chapple (1996) for New Zealand, by Dwyer and Leong (2000) for Australia, by Castellanos et al (2003) for Mexico, by Kuroda and Yamamoto (2003a, 2003b, 2003c and Kimura and Ueda (2001) for Japan, by Fehr and Goette (2003) for Switzerland, by Bauer et al (2003) and Knoppik and Beissinger (2003) for Germany, by Nickell and Quintini (2001) for the United Kingdom, and by Agell and Lundborg (2003) for Sweden. 70 See, for example, O'Brien (1989) and Hanes (2000). 71 See Yellen and Akerlof (2004, p. 24).…”

Section: Nominal Considerations In Wage Behaviormentioning

confidence: 99%

The Missing Motivation in Macroeconomics

Akerlof

2007

American Economic Review

407

146

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Section: Nominal Considerations In Wage Behaviormentioning

confidence: 99%

The Missing Motivation in Macroeconomics

Akerlof

2007

American Economic Review

407

146

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“…Wages were not unusually rigid during this period falling employment and output. Wages were not unusually rigid during this period (Hanes 2000); rather, downward stickiness is a fact of life in modern economies. (Hanes 2000); rather, downward stickiness is a fact of life in modern economies.…”

Section: The Gold Standard and The Great Depressionmentioning

confidence: 91%

“…Wages were not unusually rigid during this period (Hanes 2000); rather, downward stickiness is a fact of life in modern economies. (Hanes 2000); rather, downward stickiness is a fact of life in modern economies. Figure 1 shows indices of wages and salaries between 2008 and 2012 in Greece, Figure 1 shows indices of wages and salaries between 2008 and 2012 in Greece, Ireland, Portugal, and Spain, four countries currently trying to achieve nineteenthIreland, Portugal, and Spain, four countries currently trying to achieve nineteenthcentury style internal devaluations.…”

Section: The Gold Standard and The Great Depressionmentioning

confidence: 91%

“…First, wages and prices were more fl exible then than subsequently: Hanes and First, wages and prices were more fl exible then than subsequently: Hanes and James (2003) Hanes (1993Hanes ( , 2000 fi nds a decline in fl exibility from the 1890s before World War I: Hanes (1993Hanes ( , 2000 fi nds a decline in fl exibility from the 1890s onwards associated with the spread of large-scale, capital-intensive, concentrated onwards associated with the spread of large-scale, capital-intensive, concentrated industry. Cross-country analysis by Basu and Taylor (1999) and Chernyshoff, Jacks, industry.…”

Section: The Adjustment Problem: What Can We Learn From the Gold Stanmentioning

confidence: 99%

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Cross of Euros

O’Rourke

Taylor

2013

Journal of Economic Perspectives

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The eurozone currently confronts severe short-run macroeconomic adjustment problems and a deficient institutional architecture that has to be reformed in the longer run. Europe's efforts at economic and monetary union are historically unprecedented. However, the gold standard provides lessons regarding what will and won't work, macroeconomically and politically, in the short run, while US history provides long-run lessons regarding appropriate institutional structures. The latter also suggests that institutional reform only happens at times of great crisis, and that it cannot be taken for granted. The eurozone's leaders may therefore ultimately have to take heed of the lessons of history regarding currency union breakups.

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“…Among others, Hines (2000) shows that nominal wages were rigid in the downturns in the US in 1893, 1929and 1981. Fregert (2000 provides evidence of downward nominal wage rigidity in Sweden during the Great Depression.…”

Section: Empirical Evidencementioning

confidence: 96%

Wage Formation under Low Inflation

Holden

Collective Bargaining and Wage Formation

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This paper reviews the literature on the effects of low steady-state inflation on wage formation, focusing on four different effects. First, under low inflation, downward nominal wage rigidity (DNWR) may prevent real wage cuts that would have happened had inflation been higher. Second, wages (and prices) are given in nominal contracts, and inflation affects both how often wages are adjusted, and to what extent wages are set in a forward-looking manner. Third, incomplete labour contracts may provide workers with scope for inflicting costs on the firm without violating the contract, thus forcing the firm to accept a rise in nominal wages. Fourth, if effort depends on wages relative to a reference level, and workers and firms underweight inflation when updating the reference level, positive but moderate inflation may reduce wage pressure. The paper ends by a brief survey of empirical evidence, and a discussion of whether labour markets may adapt to a low inflation environment.

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Nominal Wage Rigidity and Industry Characteristics in the Downturns of 1893, 1929, and 1981

Cited by 43 publications

References 14 publications

The Missing Motivation in Macroeconomics

The Missing Motivation in Macroeconomics

Cross of Euros

Wage Formation under Low Inflation

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