Journal Article

Do rising labor costs trigger higher inflation?


Abstract: The evidence that developments in compensation growth lead overall CPI inflation has thus far been inconclusive. This study, however, sheds new light on the relationship between labor costs and price inflation. By breaking down compensation and prices into their various components, the author finds that compensation growth in the service-producing segment of the private sector can help predict prices for a specific group of services.

Keywords: Labor market; Wages; Inflation (Finance);

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Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Current Issues in Economics and Finance

Publication Date: 1997

Volume: 3

Issue: Sep

Order Number: 11