Identifying inflations grease and sand effects in the labor market
Abstract: An effort to distinguish inflations distortionary effects from its facilitation of adjustments to shocks when wages are rigid downward. It uses the following identification strategy: inflation-induced deviations among employers mean wage changes represent unintended intramarket distortions (sand), while inflation-induced, interoccupational wage changes reflect adjustments that might have been prevented by nominal wage rigidity (grease).
File format is application/pdf
Description: Full text
Provider: Federal Reserve Bank of Cleveland
Part of Series: Working Papers (Old Series)
Publication Date: 1997