Wage Inflation and Worker Uncertainty

The development of the theory of dynamic inflation begins by linking wage inflation and unemployment. In further developments, factor of expectation is classified into inflation model. The study used inflation data is important for ASEAN, because ASEAN is one of the strengths of the international economy. This study analyzes the dynamics of inflation in the ASEAN using framework the New-Keynesian Phillips Curve (NKPC) model. The data used is the quarterly panel data from 5 ASEAN members in the period 2005.QI–2018.QIV. The study of this dynamic inflation applies quarter to quarter inflation data, meaning that the inflation rate is the percentage change in the general price of the current quarter compared to last quarter general price divided by the last quarter. The empirical results are estimated by using the Generalized Method of Moment (GMM), both of the system and first different indicates that the pattern formation of inflation expectations are backward-looking and forward-looking. In addition, the estimated NKPC models show the backward-looking behavior is more dominant than the forward looking. Changes in inflation are not entirely influenced by expectations of inflation in each country. Changes in inflation are also influenced by the output gap, changes in money supply, and exchange rate. Based on the findings of this study, it can be concluded that the NKPC models can explain the dynamics of inflation in each country in the ASEAN region.

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The Taylor principle is valid under wage stickiness

The B E Journal of Macroeconomics ◽

10.1515/bejm-2014-0160 ◽

2016 ◽

Vol 16 (2) ◽

Author(s):

Alexis Blasselle ◽

Aurélien Poissonnier

Keyword(s):

Continuous Time ◽

Limit Case ◽

Policy Rule ◽

Price Inflation ◽

Trade Off ◽

Wage Stickiness ◽

Keynesian Model ◽

Monetary Policy Rule ◽

Relevant Variables ◽

Wage Inflation

AbstractWe consider the textbook neo-Keynesian model with staggered prices and wages in discrete time. We prove analytically that the Taylor principle holds in this case. When both contracts exhibit sluggish adjustment to market conditions, the policy maker faces a trade-off between stabilizing three welfare relevant variables: output, price inflation and wage inflation. We consider a monetary policy rule designed accordingly: the central banker can react to both inflations and the output gap. In addition to generalizing the Taylor principle we show that the frontier of determinacy embeds the frontier derived with staggered prices only, generalizes the frontier of determinacy in the limit case of continuous time and is symmetric in price and wage inflations.

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Cost-of-Living Clauses in Union Contracts: Determinants and Effects

ILR Review ◽

10.1177/001979398303600309 ◽

1983 ◽

Vol 36 (3) ◽

pp. 447-460 ◽

Cited By ~ 13

Author(s):

Wallace E. Hendricks ◽

Lawrence M. Kahn

Keyword(s):

Bargaining Power ◽

Cost Of Living ◽

Inflation Uncertainty ◽

Wage Inflation ◽

Union Bargaining Power ◽

Unanticipated Inflation

This study investigates, for the period 1969–81, the determinants of the incidence and strength of cost-of-living adjustment (COLA) clauses in U.S. manufacturing and the effect of those clauses on wage inflation. The sample includes approximately 5,570 union contracts in over 2,600 bargaining relationships. The authors find that both union bargaining power and inflation uncertainty positively affected the probability that a COLA clause was adopted as well as the strength of the clause adopted. Negatively influencing the incidence and strength of COLA clauses during the period studied were unanticipated changes in an industry's prices. The authors also find evidence that wage inflation was greater under contracts with uncapped COLAs than under all other contracts, a result that also was positively influenced by the amount of unanticipated inflation. From these results, the authors suggest a number of possible trends in the use and effects of COLA clauses.

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Inflation and Unemployment Trade-off: Is Phillips Curve True for African Developing Countries? Evidence from Sudan

Journal of Economic Science Research ◽

10.30564/jesr.v4i3.3243 ◽

2021 ◽

Vol 4 (3) ◽

Author(s):

Omer Allagabo Omer Mustafa

Keyword(s):

Economic Growth ◽

Developing Countries ◽

Phillips Curve ◽

Economic Thought ◽

Trade Off ◽

Long Run ◽

Short Run ◽

Wage Inflation ◽

The Relationship

The relationship between wage inflation and unemployment (Phillips Curve) is controversial in economic thought, and the controversy is centered around whether there is always a trade-off or not. If this relationship is negative it is called The short-run Fillips Curve. However, in the long run, this relationship may probable not exist. The matter of how inflation and unemployment influence economic growth, is debatably among macroeconomic policymakers. This study examines the behavior of the Phillips Curve in Sudan and its effect on economic growth.

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Price inflation and wage inflation

Economics Letters ◽

10.1016/0165-1765(88)90216-9 ◽

1988 ◽

Vol 27 (1) ◽

pp. 35-40 ◽

Cited By ~ 2

Author(s):

Augustin Kwasi Fosu ◽

Shamsul Huq

Keyword(s):

Price Inflation ◽

Wage Inflation

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Australian Labour Market Issues: an Historical Perspective

Journal of Industrial Relations ◽

10.1177/002218569804000410 ◽

1998 ◽

Vol 40 (4) ◽

pp. 690-715 ◽

Cited By ~ 3

Author(s):

Joe Isaac

Keyword(s):

Labour Market ◽

Trade Unions ◽

Historical Perspective ◽

Industrial Relations ◽

Institutional Arrangement ◽

Safety Net ◽

Women's Wages ◽

Recent Developments ◽

Wage Inflation

This paper provides an historical perspective on topics related to recent developments in the Australian industrial relations system discussed in this issue of the Journal— the 'living wage' concept and the safety net, 'fairness' in relative wages, women's wages, the Accord, labour market decentralisation and the role of trade unions. It concludes that recent legislation was not necessary to facilitate increased productivity because the prevailing system had shown sufficient responsiveness to the needs of the economy, both macro and micro. By limiting the jurisdiction of the AIRC and reducing the power of the weaker unions, recent legislation bas created a dual system with a less equitable pay structure and an institutional arrangement less able to deal with wage inflation under more buoyant economic conditions.

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