IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v54y1978i2p195-218.html
   My bibliography  Save this article

Wage Inertia and Comparison Effects in Australian Award Wage Determination, 1964‐74

Author

Listed:
  • P. K. TRIVEDI
  • J. RAYNER

Abstract

This paper attempts to explain the determination of average award wage changes without assuming that the outcome of certain strategic wage settlements is known. Models which allow for habit‐inertia and comparison effects are constructed. It is argued that the main impact of these factors is on the specification and interpretation of lagged adjustment of wages to changes in its determinants. These models are empirically tested using the pre‐indexation quarterly data. An analysis of 1973‐74 wage experience is also provided.

Suggested Citation

  • P. K. Trivedi & J. Rayner, 1978. "Wage Inertia and Comparison Effects in Australian Award Wage Determination, 1964‐74," The Economic Record, The Economic Society of Australia, vol. 54(2), pages 195-218, August.
    • Handle: RePEc:bla:ecorec:v:54:y:1978:i:2:p:195-218
    DOI: 10.1111/j.1475-4932.1978.tb00330.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.1978.tb00330.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.1978.tb00330.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hieser, R O, 1970. "Wage Determination with Bilateral Monopoly in the Labour Market: A Theoretical Treatment," The Economic Record, The Economic Society of Australia, vol. 46(113), pages 55-72, March.
    2. R. O. Hieser, 1970. "Wage Determination with Bilateral Monopoly in the Labour Market: A Theoretical Treatment," The Economic Record, The Economic Society of Australia, vol. 46(1), pages 55-72, March.
    3. Dufty, N F, 1971. "Earnings Drift in Australian Secondary Industry," The Economic Record, The Economic Society of Australia, vol. 47(119), pages 410-417, September.
    4. Tobin, James, 1972. "Inflation and Unemployment," American Economic Review, American Economic Association, vol. 62(1), pages 1-18, March.
    5. Denise R. Osborn, 1976. "Maximum Likelihood Estimation of Moving Average Processes," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 1, pages 75-87, National Bureau of Economic Research, Inc.
    6. E. A. Boehm, 1974. "Distortions in Relative Wages: The Inflationary Consequences and Policy Implications," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 7(4), pages 39-50, December.
    7. N. F. Dufty, 1971. "Earnings Drift in Australian Secondary Industry," The Economic Record, The Economic Society of Australia, vol. 47(3), pages 410-417, September.
    8. Arthur M. Okun, 1975. "Inflation: Its Mechanics and Welfare Costs," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 6(2), pages 351-402.
    9. Manning, R & Richardson, S & Webb, L Roy, 1972. "Market Forces and the Principle of Comparative Wage Justice: Discord or Harmony?," Australian Economic Papers, Wiley Blackwell, vol. 11(19), pages 131-144, December.
    10. Desai, Meghnad, 1973. "Growth cycles and inflation in a model of the class struggle," Journal of Economic Theory, Elsevier, vol. 6(6), pages 527-545, December.
    11. Robert E. Hall, 1974. "The Process of Inflation in the Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 5(2), pages 343-410.
    12. John Eatwell & John Llewellyn & Roger Tarling, 1974. "Money Wage Inflation in Industrial Countries," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 515-523.
    13. Johnston, J, 1972. "A Model of Wage Determination under Bilateral Monopoly," Economic Journal, Royal Economic Society, vol. 82(327), pages 837-852, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Calvin D. Siebert & Mahmood A. Zaidi, 1984. "The Relation Between Profits and the Rate of Change of Money Wages in Australia," Australian Journal of Management, Australian School of Business, vol. 9(1), pages 121-129, June.
    2. Michael G. Kirby, 1981. "An Investigation of the Specification and Stability of the Australian Aggregate Wage Equation," The Economic Record, The Economic Society of Australia, vol. 57(1), pages 35-46, March.
    3. R.M. Simes & C.J. Richardson, 1987. "Wage Determination In Australia," The Economic Record, The Economic Society of Australia, vol. 63(2), pages 144-155, June.
    4. E. A. Boehm, 1984. "Money Wages, Consumer Prices, and Causality in Australia," The Economic Record, The Economic Society of Australia, vol. 60(3), pages 236-251, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marcus Dittrich, 2010. "Welfare Effects of Local versus Central Wage Bargaining," LABOUR, CEIS, vol. 24(1), pages 26-34, March.
    2. Stavros Drakopoulos & Ioannis Katselidis, 2014. "The Development of Trade Union Theory and Mainstream Economic Methodology," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(4), pages 1133-1149, December.
    3. Dittrich, Marcus, 2006. "Welfare Effects of Union Bargaining Centralisation in a Two-Sector Economy," MPRA Paper 11, University Library of Munich, Germany, revised Sep 2006.
    4. Elizabeth Webster & Yi‐Ping Tseng, 2002. "The Determinants of Relative Wage Change in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(1), pages 70-84, March.
    5. Emmanuel Saez & Pascal Michaillat, 2013. "A Theory of Aggregate Supply and Aggregate Demand as Functions of Market Tightness with Prices as Parameters," 2013 Meeting Papers 1216, Society for Economic Dynamics.
    6. Dang T. Tran, 1987. "A Conflict Model of Stagflation," Eastern Economic Journal, Eastern Economic Association, vol. 13(1), pages 7-18, Jan-Mar.
    7. Katsuhito Iwai, 1976. "On Disequilibrium Economic Dynamics. Part IV. The Theory of Long-Run Phillips Curve," Cowles Foundation Discussion Papers 423, Cowles Foundation for Research in Economics, Yale University.
    8. Habib Ahmed & Stephen M. Miller, 1999. "A Model of Endogenous Union Density and Membership," Working papers 1999-01, University of Connecticut, Department of Economics.
    9. William Coleman, 2013. "A Young Tree Dead? The Story of Economics in Australia and New Zealand," CEPR Discussion Papers 688, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    10. repec:spo:wpecon:info:hdl:2441/6120 is not listed on IDEAS
    11. Levy, Daniel & Dutta, Shantanu & Bergen, Mark & Venable, Robert, 1998. "Price Adjustment at Multiproduct Retailers," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(2), pages 81-120.
    12. Mario Amendola & Jean Luc Gaffard, 2014. "Novelty,Hysteresis,and Growth," Documents de Travail de l'OFCE 2014-12, Observatoire Francais des Conjonctures Economiques (OFCE).
    13. Philip Du Caju & Erwan Gautier & Daphne Momferatu & Melanie Ward-Warmedinger, 2009. "Institutional Features of Wage Bargaining in 23 European Countries, the US and Japan," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 12(2), pages 57-108, Winter.
    14. Park, Seonyoung & Shin, Donggyun, 2017. "The extent and nature of downward nominal wage flexibility: An analysis of longitudinal worker/establishment data from Korea," Labour Economics, Elsevier, vol. 48(C), pages 67-86.
    15. Janet L. Yellen, 2015. "Inflation Dynamics and Monetary Policy : A speech at the Philip Gamble Memorial Lecture, University of Massachusetts, Amherst, Amherst, Massachusetts, September 24, 2015," Speech 863, Board of Governors of the Federal Reserve System (U.S.).
    16. Matheus R. Grasselli & Adrien Nguyen Huu, 2015. "Inflation and Speculation in a Dynamic Macroeconomic Model," JRFM, MDPI, vol. 8(3), pages 1-26, July.
    17. Alok Kumar, 2008. "Inflation And The Dispersion Of Real Wages," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(2), pages 377-399, May.
    18. Stanley Fischer, 1996. "Why are central banks pursuing long-run price stability?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 7-34.
    19. John Haltiwanger & Mark Plant, 1984. "How Should We Measure Slackness in the Labor Market?," UCLA Economics Working Papers 343, UCLA Department of Economics.
    20. Ichiishi, Tatsuro, 1985. "Management versus ownership, II," European Economic Review, Elsevier, vol. 27(2), pages 115-138, March.
    21. Reizer, Balázs, 2022. "Employment and Wage Consequences of Flexible Wage Components," Labour Economics, Elsevier, vol. 78(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecorec:v:54:y:1978:i:2:p:195-218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.