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Wage Indexation and Macroeconomic Stability [electronic resource] : The Gray-Fischer Theorem Revisted, Jadresic, Esteban.

Author/Creator:
Jadresic, Esteban.
Publication:
Washington, D.C. : International Monetary Fund, 1996.
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 96/121.
IMF Working Papers; Working Paper No. 96/121
Format/Description:
Government document
Book
1 online resource (24 p.)
Local subjects:
Inflation.
Inflation rate.
Inflation rates.
Lower inflation.
Macroeconomic stability.
Monetary economics.
Monetary policy.
Money supply.
Price level.
Rate of inflation.
Rational expectations.
Real money.
Real value.
Real wages.
Wage.
Wage adjustments.
Wage increase.
Wage increases.
Wage indexation.
Wages.
United States.
Summary:
Since the seminal papers by Gray (1976) and Fischer (1977) were published, the major theorem of the wage indexation literature has been that indexing wages stabilizes output when shocks are nominal and destabilizes output when shocks are real. This paper reexamines the validity of this proposition taking into account the lags in actual indexation practices in an economy similar to that originally considered by those authors. It shows that in such a setup, wage contracts indexed to lagged inflation tend to destabilize output regardless of whether shocks are nominal or real.
Notes:
Description based on print version record.
Contributor:
Jadresic, Esteban.
Other format:
Print Version:
ISBN:
1451854331:
9781451854336
ISSN:
1018-5941
Publisher Number:
10.5089/9781451854336.001
Access Restriction:
Restricted for use by site license.
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