The great increase in relative wage volatility in the United States

Champagne, Julien; Kurmann, André

doi:10.1016/j.jmoneco.2012.10.023

Cited by 29 publications

(13 citation statements)

References 26 publications

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“…The empirical evidence therefore suggests that γ has become smaller over time, meaning that labor market imperfections play a smaller role today than in the 1960s and 1970s, leading to greater wage flexibility. This finding is consistent with the evidence in Blanchard and Galí () as well as Champagne and Kurmann () and explains why the volatility of real wages has increased relative to that of real activity and inflation. Moreover, it provides an additional explanation for the Great Moderation era beyond the decline in the variance of news shocks, namely that increased wage flexibility has helped to dampen the impact of unfavorable technology news (or other economic) shocks.…”

Section: Time‐varying Impact Of Technology News Shockssupporting

confidence: 92%

“…The contemporaneous response of the real wage to a news shock of given size is about three to six times larger at the end of the sample than at the beginning. This finding squares with the evidence in Blanchard and Galí () as well as Champagne and Kurmann () and provides a further possible explanation for the Great Moderation in real activity and inflation. Greater wage flexibility has presumably helped to dampen the impact of unfavorable economic shocks.…”

Section: Introductionsupporting

confidence: 88%

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Technology News and the US Economy: Time Variation and Structural Changes

Berg

2015

Scottish J Political Eco

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This paper examines the time varying impact of technology news shocks on the U.S. economy during the Post-World War II era using a structural time varying parameter vector autoregressive (TVP-VAR) model. The identification restrictions are derived from a standard new Keynesian dynamic stochastic general equilibrium (DSGE) model and hold for a wide range of parameter constellations. In addition, the set of restrictions is sufficient to discriminate technology news shocks from other supply and demand side disturbances -technology surprise shocks among them. Overall, there is little evidence that the variance of technology news shocks or their transmission to real activity and inflation has changed over time. However, I detect significant time variation in the endogenous monetary policy reaction to technology news shocks; responding strongly to inflation most of the time, but less during the Great Inflation period. The evidence of this paper thus supports the hypothesis that the high inflation rates of the mid and late 1970s were the result of bad policy rather than bad luck.

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Section: Time‐varying Impact Of Technology News Shockssupporting

confidence: 92%

Section: Introductionsupporting

confidence: 88%

Technology News and the US Economy: Time Variation and Structural Changes

Berg

2015

Scottish J Political Eco

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“…This calculation omits the impact of volatility of wages throughout lifetime to the decision of working population. Champagne and Kurmann () provide evidence on the increase in the volatility of real average hourly wages relative to output over 25 years in the United States. They state that this increase in relative volatility is caused by increases in the relative volatility of hourly wages across different groups of workers.…”

Section: Introductionmentioning

confidence: 99%

Income variability and selection of the pension system

Göktuna

2019

Manage Decis Econ

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This paper provides a simple two‐period, game theoretic set‐up with heterogeneous agents to analyse individual selection of a pension scheme by different categories of agents. Agents have been differentiated according to their income variability. We describe Bayesian equilibria and provide examples to illustrate. The design of a pension scheme requires the consent of all the population, and we have shown that differences of volatility of income contribute to the divergence regarding the decision of a pension investment alternative. We also provide support for the subsistence of unfunded scheme in economies with demographic aging and with promising returns in funded alternatives.

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“…8 The two di¤erences combined account for the bulk of not only the divergence in growth and volatility over the past decades but also the initial level di¤erences of the two earnings series.…”

Section: Introductionmentioning

confidence: 99%

“…This is interesting because the CPS May/ORG is one of the most widely used 8 The CES began publishing all-employee wages in March 2006. We will examine this all-employees series at the end of Section 4.…”

Section: Introductionmentioning

confidence: 99%

Reconciling the divergence in aggregate U.S. wage series

2017

Self Cite

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The great increase in relative wage volatility in the United States

Cited by 29 publications

References 26 publications

Technology News and the US Economy: Time Variation and Structural Changes

Technology News and the US Economy: Time Variation and Structural Changes

Income variability and selection of the pension system

Reconciling the divergence in aggregate U.S. wage series

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