The Seminar will be held at the Visitor Centre at 3 pm.
Jarkko Turunen
ECB
Abstract
The paper proceeds as follows. First, we briefly review the empirical literature. Next, we describe our data and empirical approach. We then establish that wage changes show substantial dispersion that rises with the rate of wage inflation, as predicted by grease and sand effects. Next, we examine histograms of wage changes for the particular asymmetries and spikes that are characteristic of downward real and nominal wage rigidity. This yields estimates of the prevalence of both types of wage rigidity for each dataset and year that we then analyze for insight into the causes and consequences of those rigidities. Finally, we examine the linkage between wage change dispersion and inflation for evidence of errors and adjustment lags (sand effects).