Publication type
Journal Article
Author
Publication date
June 1, 2000
Abstract:
This paper studies the degree of downward rigidity in nominal wages in the United Kingdom using micro-data. Around 9 % of employees who remain in the same job from one year to the next have zero pay growth. But on investigating the causes of rigidity we find that up to nine-tenths can be attributed to 'symmetric' causes (such as contracts and menu costs) or to error. Thus only 1 % of workers have pay that may be downwardly rigid. This suggests asymmetric, downward rigidity is not large enough to have serious macroeconomic consequences. The labour market provides almost no evidence to support a positive inflation target.
Published in
Economic Journal
Volume
Volume: 110 (462):176-195
Subjects
Notes
Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*
#508776