Does the Consideration of Nominal Wage Growth Imply a High Level of Compared to Consumer Price Inflation?

In continuation of our scientific research, published in the previous issue of the journal, this article was written. In the process of research, the methods of analysis and synthesis, the graphic method were used. The results of this study prove the general theoretical conclusion about the relationship between nominal wage growth and inflation. Achieving financial stability is possible with a decrease in the rate of inflation. Based on the analysis of the scientific periodic and monographic literature, the calculations we have cited, the article concluded that the reasons for inflation in Russia are mostly non-monetary. But when choosing a macroeconomic policy, it is necessary to base on the coordination of influence on both monetary and non-monetary factors of inflation.

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Conflicting Interests and Structural Inflation: TUrkey, 1980-1990

The Pakistan Development Review ◽

10.30541/v32i3pp.303-327 ◽

1993 ◽

Vol 32 (3) ◽

pp. 303-327 ◽

Cited By ~ 7

Author(s):

A . Erinc Yeldan

Keyword(s):

General Equilibrium ◽

Equilibrium Model ◽

Computable General Equilibrium ◽

Aggregate Demand ◽

General Equilibrium Model ◽

Equilibrium Analysis ◽

Nominal Wage ◽

Credit Expansion ◽

Price Inflation ◽

National Output

The paper analyses the structural causes of the recent Turkish inflationary episode. It is argued that monetary policies based on credit tightening alone are not likely to yield the desired target of price stabilisation. Instead. it is hypothesised that the underlying sources of price inflation are affected by income inequality and conflicting claims on national output; and that excessive credit expansion serves mainly to accommodate the inertial inflation thereby originated in the real sector. Given this hypothesis. the paper employs a computable general equilibrium model to investigate four distinct sources of structural inflation for the Turkish economy: (i) the profit/rent inflation based on monopolistic mark-Ups over prime costs; (ii) imported inflation due to the import-dependent structure of the domestic industry; (iii) cost-push and demand inflation due to urban wage claims; and (iv) inflation that results from the fiscal pressures of the government's budget deficits. The general equilibrium model is in the Keynesian tradition in determining the production level by aggregate demand constraints. Furthermore. it accommodates oligopolistic mark-up rules and working capital expenses for price determination. and nominal wage fixity to determine the level of employment. The general equilibrium analysis of the macro economy suggests that. over the analysed period. conflicting claims of various social classes on national output and conflicting rates of intersectoral accumulation warranted by competing producer groups have become important sources of disequilibria in the domestic economy; and that the distributional conflict among socio-economic classes had a direct impact on the formation of price movements.

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The post-crisis surge in unemployment led to slower nominal wage growth, but this effect has now been reversed in some countries

OECD Employment Outlook 2016 - OECD Employment Outlook ◽

10.1787/empl_outlook-2016-graph5-en ◽

2016 ◽

Keyword(s):

Wage Growth ◽

Nominal Wage

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Comparative Properties of Models of the UK Economy

National Institute Economic Review ◽

10.1177/002795019013300107 ◽

1990 ◽

Vol 133 ◽

pp. 91-115 ◽

Cited By ~ 13

Author(s):

P.G. Fisher ◽

D.S. Turner ◽

K.F. Wallis ◽

J.D. Whitley

Keyword(s):

Phillips Curve ◽

Demand Management ◽

Nominal Wage ◽

Natural Rate ◽

Price Inflation ◽

Trade Off ◽

Natural Rate Of Unemployment ◽

Long Run ◽

Recent Developments ◽

The Uk

The nature of the association between inflation and the level of unemployment has been a persistent issue of controversy over the last three decades. Initially, attention focussed on the statistical relationship between nominal wage inflation and unemployment— the Phillips curve—which could be seen equally as a relationship between price inflation and unemployment, if prices are a constant mark-up on wages. This was quickly adopted as a menu for policy choice, describing the trade-off between increases in unemployment and reductions in inflation. By the 1970s, however, the question was whether a long-run trade-off existed at all, the OECD economies having experienced rising unemployment and, simultaneously, rising inflation. The subsequent re-examination of labour market behaviour introduced the concept of an equilibrium rate (the natural rate) of unemployment which, in the monetarist view, was not amenable to demand management policies. More recent developments reflect a growing concern with the supply side of the economy, including the question of what determines the non accelerating inflation rate of unemployment (NAIRU).

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Wage Growth Puzzle and Capacity Utilization

Applied Economics and Finance ◽

10.11114/aef.v6i2.3985 ◽

2019 ◽

Vol 6 (2) ◽

pp. 15

Author(s):

Arto Kovanen

Keyword(s):

Labor Market ◽

Capacity Utilization ◽

Wage Growth ◽

The United States ◽

Policy Formulation ◽

Strategic Decision ◽

Output Gap ◽

Price Inflation ◽

Recent Trends ◽

Tight Labor Market

Wage growth and consumer price inflation in the United States remain weak, despite robust labor market and a healthy economy. This has been a conundrum for policymakers and economists alike, albeit it is not without parallels. In this paper, we analyze recent trends in the labor market. We point out that a number of indicators are providing mixed signals about the tight labor market, including wage growth that has remained muted, vacancy duration rates that have stayed remarkable stable in certain sectors, and the rate of capacity utilization, which is cyclically low and out of sync with other measures of resource utilization (e.g., output gap and unemployment rate). This leads us to conclude that there could be other forces that explain these phenomena. In this paper, we focus on capacity utilization and contend that low capacity utilization rates are the outcome of strategic decision-making by corporations, rather than inefficient demand, which permits firms to manage their resources more effectively. It seems to be particularly important when economic and policy uncertainties are elevated, such as in the post-financial crisis environment. More flexible use of capacity has implications not only for the labor market, but also for investments. Understanding capacity utilization would contribute to monetary policy formulation when the signal coming from the rate of capacity utilization is not consistent with those coming from the labor market and the output gap. This points to the need to continue monitor a broad range of indicators to avoid potential policy errors.

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