Patterns of nominal and real wage rigidity

Abstract

We study the distortions that downward nominal and real wage rigidity would induce to a flexible form of a notional, rigidity-free, distribution of wage change using the histogram-location approach. We examine alternative methods of generating the histograms that support the econometric search for rigidity distortions and implement our approach to inflation sub-periods that should be characterised by different patterns of nominal and real rigidities. We establish the general applicability of the approach to these sub-periods and find results consistent with expectations.

Citation

Christofides, L.N. and Nearchou, P. (2010), "Patterns of nominal and real wage rigidity", Polachek, S.W. and Tatsiramos, K. (Ed.) Jobs, Training, and Worker Well-being (Research in Labor Economics, Vol. 30), Emerald Group Publishing Limited, Leeds, pp. 301-337. https://doi.org/10.1108/S0147-9121(2010)0000030013