scholarly journals Endogenous Procyclicality of Labor Productivity, Employment, Real Wages and Effort in Conditionally Heteroskedastic Sunspots Unemployment Business Cycles With Negishi-Solow Efficiency Wages

2016 ◽  
Author(s):  
Jean-Michel Grandmont
Keyword(s):  
Business Cycles ◽  
Labor Productivity ◽  
Efficiency Wages ◽  
Real Wages

scholarly journals Panel Estimation for the Relationship between Real Wage, Inflation and Labor Productivity for OECD Countries

2019 ◽  
Author(s):  
Sevilay Konya ◽  
Zeynep Karaçor ◽  
Mücahide Küçüksucu
Keyword(s):  
Labor Productivity ◽  
Real Wage ◽  
Slovak Republic ◽  
Oecd Countries ◽  
Panel Estimation ◽  
Economic Literature ◽  
Real Wages ◽  
Wage Inflation ◽  
The Relationship ◽  
Cointegration Relationship

There are studies examining the relationship between real wage, inflation and labor productivity in the economic literature. Increase in real wages causes to an increase in labor productivity. On the other hand, productivity increases also induce inflation to fall. Therefore, the aim of this study is to investigate the relationship between real wage, inflation and labor productivity in the 22 OECD countries (Australia, Belgium, Canada, Chile, Czech Republic, France, Greece, Hungary, Japan, Korea, Latvia, Luxembourg, Mexico, Netherlands, New Zealand, Poland, Portugal, Slovak Republic, Slovenia, Spain, Turkey, United States) in the period of 1995-2017 by panel data methods. According to results, the cointegration relationship between real wage, inflation and labor productivity was found. In addition, mutual causality was determined between the variables we discussed.

scholarly journals The Relationship between Real Wages and Output: Evidence from Pakistan

2000 ◽  
Vol 39 (4II) ◽  
pp. 1111-1126 ◽  
Author(s):  
Afia Malik ◽  
Ather Maqsood Ahmed
Keyword(s):  
Business Cycles ◽  
Interest Rates ◽  
Real Wage ◽  
Phillips Curve ◽  
Labour Supply ◽  
Nominal Wage ◽  
Purchasing Power ◽  
Real Wages ◽  
The Real ◽  
The Relationship

Information on wage levels is essential in evaluating the living standards and conditions of work and life of the workers. Since nominal wage fails to explain the purchasing power of employees, real wage is considered as a major indicator of employees purchasing power and can be used as proxy for their level of income. Any fluctuations in the real wage rate have a significant impact on poverty and the distribution of income. When used in relation with other economic variables, for instance employment or output they are valuable indicators in the analysis of business cycles. There has been a long debate regarding the relationship between real wages and the employment (output). Despite the apparent simplicity, the relationship between real wages and output has remained deceptive both theoretically and empirically. Keynes (1936) viewed cyclical movements in employment along a stable labour demand schedule thus indicating counter cyclical real wages. His deduction is in line with sticky wages and sticky expectations, which augments models like Phillips curve. In these models real wages behaved as counter-cyclical as nominal wages are slow to adjust during recession (decrease in aggregate demand and associated slowdown in price growth). Stickiness of wages or expectations shifts the labour supply over the business cycles [Abraham and Haltiwanger (1995)]. Barro (1990) and Christiano and Eichenbaum (1992) have associated these labour supply shifts with intertemporal labour-leisure substitution. This in response to temporary changes in real interest rates (fiscal policy shocks) could yield counter-cyclical real wages. However, Long and Plosser (1983) and Kydland and Prescott (1982) while studying the real business cycle models highlight on the technology shocks which leads to pro-cyclical real wages.

scholarly journals IS THE GREAT DECOUPLING REAL?

2017 ◽  
Vol 18 (3) ◽  
pp. 451-467 ◽  
Author(s):  
Marinko ŠKARE ◽  
Damian ŠKARE
Keyword(s):  
Economic Growth ◽  
Labor Markets ◽  
Labor Productivity ◽  
Breaking Point ◽  
Real Wages ◽  
Policy Makers ◽  
Labor Share ◽  
The U.S

The great decoupling is real. Productivity and employment/wages link changed after 1980 in many countries, not just the U.S. This study investigates the productivity and employment/wages link (1950–2014) looking for empirical proof of the “great decoupling” put forward by Brynjolfsson and Mcafee (2013). The results should stimulate policymakers to openly question why real wages and productivity don’t line up with the theory. We use the Hodrick and Prescott (1997) filter to isolate trends in real wages, labor share in GDP, and labor productivity and rolling correlation to explore if the great decoupling is real. We have found that the great decoupling i.e. The divergence between real wages/employment and productivity is present in all countries (10 in the sample). The dynamics of the great decoupling are however different between the countries although year 1980 seems to be a dominant breaking point for the start of the phenomena. This paper provides multicounty empirical proof of the presence of the great decoupling phenomena and explores its dynamics over 1950–2014. Policy makers as well as firms and unions should take the existence of this phenomena seriously since it can have significant consequences on economic growth and labor markets’ functioning.

scholarly journals A Reassessment of Real Business Cycle Theory

2014 ◽  
Vol 104 (5) ◽  
pp. 177-182 ◽  
Author(s):  
Ellen R. McGrattan ◽  
Edward C. Prescott
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Labor Productivity ◽  
Intangible Capital ◽  
Real Business Cycle ◽  
Business Cycle Theory ◽  
Intangible Investments

During the downturn of 2008-2009, output and hours fell significantly, but labor productivity rose. These facts have led many to conclude that there is a significant deviation between observations and current macrotheories that assume business cycles are driven, at least in part, by fluctuations in total factor productivities of firms. We show that once investment in intangible capital is included in the analysis, there is no inconsistency. Measured labor productivity rises if the fall in output is underestimated; this occurs when there are large unmeasured intangible investments. Microevidence suggests that these investments are large and cyclically important.

scholarly journals Real Wages and Labor Productivity in Britain and Germany, 1871–1938: A Unified Approach to the International Comparison of Living Standards

2010 ◽  
Vol 70 (2) ◽  
pp. 400-427 ◽  
Author(s):  
Stephen Broadberry ◽  
Carsten Burhop
Keyword(s):  
Labor Productivity ◽  
Real Wage ◽  
Service Sector ◽  
Wage Gap ◽  
Living Standards ◽  
Industrial Workers ◽  
Unified Approach ◽  
Real Wages ◽  
Sectoral Differences ◽  
German Worker

Throughout the period 1871–1938, the average British worker was better off than the average German worker, but there were significant differences between major sectors. For the aggregate economy, the real wage gap was about the same as the labor productivity gap, but again there were important sectoral differences. Compared to their productivity, German industrial workers were poorly paid, whereas German agricultural and service sector employees were overpaid. This affected the competitiveness of the two countries in these sectors. There were also important differences in comparative real wages by skill level, affecting the extent of poverty.

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