Uncertainty and Labor Contract Durations

49 Pages Posted: 1 Feb 2000

See all articles by Joseph S. Tracy

Joseph S. Tracy

Federal Reserve Bank of New York; National Bureau of Economic Research (NBER)

Robert W. Rich

Federal Reserve Banks - Federal Reserve Bank of Cleveland

Multiple version iconThere are 2 versions of this paper

Date Written: June 2000

Abstract

This paper provides an empirical investigation into the relationship between ex ante U.S. labor contract durations and uncertainty over the period 1970 to 1995. We construct measures of inflation uncertainty as well as aggregate nominal and real uncertainty. The results not only corroborate previous findings of an inverse relationship between contract durations and inflation uncertainty, but also document that this relationship extends to both measures of aggregate uncertainty. We also explore the robustness of this relationship to various measures of inflation uncertainty that have appeared in the literature.

JEL Classification: J41, J51, E24

Suggested Citation

Tracy, Joseph and Rich, Robert W., Uncertainty and Labor Contract Durations (June 2000). FRB of New York Staff Report No. 106. Available at SSRN: https://ssrn.com/abstract=199895 or http://dx.doi.org/10.2139/ssrn.199895

Joseph Tracy (Contact Author)

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Robert W. Rich

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

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