Patterns of Nominal and Real Wage Rigidity

45 Pages Posted: 26 Oct 2009

See all articles by Louis N. Christofides

Louis N. Christofides

University of Cyprus - Department of Economics; University of Guelph; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); IZA Institute of Labor Economics

Paris Nearchou

University of Cyprus - Department of Economics

Date Written: October 28, 2008

Abstract

We study the distortions that downward nominal and real wage rigidity would induce to a flexible form of a notional, rigidity-free, distribution of wage change using the histogram-location approach. We examine alternative methods of generating the histograms that support the econometric search for rigidity distortions and implement our approach to inflation sub-periods that should be characterised by different patterns of nominal and real rigidities. We establish the general applicability of the approach to these sub-periods and find results consistent with expectations.

Keywords: real, nominal wage rigidities

JEL Classification: J52, J31

Suggested Citation

Christofides, Louis N. and Nearchou, Paris, Patterns of Nominal and Real Wage Rigidity (October 28, 2008). Research in Labor Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1493904

Louis N. Christofides (Contact Author)

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus
357 22 892448 (Phone)
357 22 892432 (Fax)

University of Guelph ( email )

Guelph, Ontario
Canada
001-519-763-8497 (Phone)

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

Poschinger Str. 5
Munich, DE-81679
Germany

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

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Paris Nearchou

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

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