IDEAS home Printed from https://ideas.repec.org/a/eis/articl/200gasteen.html
   My bibliography  Save this article

UK Monetary Policy, Earnings Growth and Labour Market Structure 1989-1998

Author

Listed:
  • A Gasteen
  • J Houston
  • D Asenova

Abstract

The Bank of England?s Monetary Policy Committee (MPC) sets UK interest rates to control inflation paying particular attention to earnings growth as measured by the Average Earnings Index (AEI). In October 1998, a revised AEI indicated that wage inflation had been overestimated bringing the conduct of monetary policy into question. This index was given credence by the popular belief that structural change in the labour market has reduced the earnings growth rate. However, a further revised AEI in March 1999 suggested wage inflation had been underestimated. This paper investigates why labour market changes have not suppressed earnings growth, assessing the influence of structural factors on the AEI. A new series of occupation-weighted, earnings indices from Labour Force and New Earnings Surveys? data is computed. The failure to adequately adjust for changes in UK labour market structure (in particular, increased service sector employment and greater female participation) is observed to have slightly underestimated earnings?growth.

Suggested Citation

  • A Gasteen & J Houston & D Asenova, 2000. "UK Monetary Policy, Earnings Growth and Labour Market Structure 1989-1998," Economic Issues Journal Articles, Economic Issues, vol. 5(2), pages 21-36, September.
    • Handle: RePEc:eis:articl:200gasteen
    as

    Download full text from publisher

    File URL: http://www.economicissues.org.uk/Files/2001/200cGasteen.pdf
    Download Restriction: no
    ---><---

    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:eis:articl:200gasteen. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Dan Wheatley (email available below). General contact details of provider: https://edirc.repec.org/data/bsntuuk.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.