Why does the cyclical behavior of real wages change over time?
Abstract: This paper seeks to understand the evolution of the cyclical behavior of U.S. real wage rates from the interwar period to the post World War II period using a dynamic general equilibrium model that emphasizes demand-driven business cycle fluctuations. In the model, changes in the cyclical behavior of real wages arise endogenously from the interactions between nominal wage and price rigidities and an evolving input-output structure.
File(s): File format is application/pdf https://www.kansascityfed.org/documents/5398/pdf-RWP02-09.pdf
Provider: Federal Reserve Bank of Kansas City
Part of Series: Research Working Paper
Publication Date: 2002
Number: RWP 02-09