Nominal-Contracting Theories of Unemployment: Evidence from Panel Data.
This paper examines economywide and sector-specific responses of real wages to nominal shocks using micro panel data from the National Longitudinal Survey of Young Men. The observed response patterns provide no support for nominal-contracting theories of unemployment, which predict that nominal surprises should be negatively correlated with real wages. In fact, both inflation and money-growth surprises are found to be essentially uncorrelated with real wages. Either a real-business-cycle model or a model with rigidities in commodity prices could be consistent with these results. Copyright 1993 by American Economic Association.
Year of publication: |
1993
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Authors: | Keane, Michael P |
Published in: |
American Economic Review. - American Economic Association - AEA. - Vol. 83.1993, 4, p. 932-52
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Publisher: |
American Economic Association - AEA |
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