Does Wage Inflation Cause Price Inflation?

17 Pages Posted: 30 Oct 2007

See all articles by Gregory D. Hess

Gregory D. Hess

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Mark Schweitzer

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Date Written: April 2000

Abstract

Recent attention has turned from unemployment levels to wage growth as an indicator of imminent inflation. But is there any evidence to support the assumption that increased wages cause inflation? This study updates and expands earlier research into this question and finds little support for the view that higher wages cause higher prices. On the contrary, the authors find more evidence that higher prices lead to wage growth.

Suggested Citation

Hess, Gregory D. and Schweitzer, Mark, Does Wage Inflation Cause Price Inflation? (April 2000). FRB of Cleveland Policy Discussion Paper No. 1, Available at SSRN: https://ssrn.com/abstract=1025464 or http://dx.doi.org/10.2139/ssrn.1025464

Gregory D. Hess (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Mark Schweitzer

Federal Reserve Banks - Federal Reserve Bank of Cleveland ( email )

East 6th & Superior
Cleveland, OH 44101-1387
United States

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