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The objective of this essay is to analyze the effects of the minimal nominal wage, a monetary aggregate and the exchange rate on the price level using the Johansen procedure for co-integration. The empirical evidence indicates the existence of a long term relationship among those variables and...
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year and the NMW shapes the timing of industry-level wage bargaining. Inflation but also changes in past aggregate wage … macro variables are 0.6, 0.4 and 0.3 respectively. Inflation and the NMW have both decreasing but positive effects all along …
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data between 1982 and 2000. By examining the effects on wages, employment and prices together we are able to provide an … wage raises wages and prices with small adverse employment effects. This suggests a general wage-price inflationary spiral …, where persistent inflation offsets some of the wage gains. The main policy implication deriving from these results is that …
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