Arthur M. Okun's last book, Prices and Quantities, contributes a theory of universal wage and price stickiness, but provides no explanation at all of historical and cross country differences in behavior. The core of this paper provides a new empirical characterization of price and wage changes...

This paper argues that rigid wages cannot provide the underpinnings of a universally valid theory of the business cycle, simply because wages are not universally rigid. Several different statistical techniques suggest that wage rates in the U.K. and Japan are between three and 15 times more...