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Do labor market activities help predict inflation?

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Author Info

  • Luojia Hu
  • Maude Toussaint-Comeau

Abstract

The authors conduct an empirical analysis of the role of labor market activities in inflation and conclude that wage growth is not very informative for predicting price inflation. But price inflation does seem to help predict wage growth.

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Bibliographic Info

Article provided by Federal Reserve Bank of Chicago in its journal Economic Perspectives.

Volume (Year): (2010)
Issue (Month): Q II ()
Pages: 52-63

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Handle: RePEc:fip:fedhep:y:2010:i:qii:p:52-63:n:v.34no.2

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Related research

Keywords: Labor market;

References

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  1. Benati, Luca, 2008. "Investigating inflation persistence across monetary regimes," Working Paper Series 0851, European Central Bank.
  2. Franke, Reiner & Flaschel, Peter & Proano, Christian R., 2006. "Wage-price dynamics and income distribution in a semi-structural Keynes-Goodwin model," Structural Change and Economic Dynamics, Elsevier, vol. 17(4), pages 452-465, December.
  3. Svensson, Lars E.O., 1997. "Inflation Forecast Targeting: Implementing and Monitoring Inflation Targets," Seminar Papers 615, Stockholm University, Institute for International Economic Studies.
  4. Jeremy Rudd & Karl Whelan, 2001. "New tests of the New-Keynesian Phillips curve," Finance and Economics Discussion Series 2001-30, Board of Governors of the Federal Reserve System (U.S.).
  5. Jeff Fuhrer & George Moore, 1993. "Inflation persistence," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
  6. Richard Clarida & Jordi Gali & Mark Gertler, 1998. "Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory," NBER Working Papers 6442, National Bureau of Economic Research, Inc.
  7. Jeffrey R. Campbell & Ellen R. Rissman, 1994. "Long-run labor market dynamics and short-run inflation," Economic Perspectives, Federal Reserve Bank of Chicago, issue Mar, pages 15-27.
  8. Sbordone, Argia M., 2002. "Prices and unit labor costs: a new test of price stickiness," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 265-292, March.
  9. Stockton, David J & Glassman, James E, 1987. "An Evaluation of the Forecast Performance of Alternative Models of Inflation," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 108-17, February.
  10. Chan G. Huh & Bharat Trehan, 1995. "Modeling the time-series behavior of the aggregate wage rate," Economic Review, Federal Reserve Bank of San Francisco, pages 3-13.
  11. John H. Rogers & Ping Wang, 1993. "High inflation: causes and consequences," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Dec, pages 37-51.
  12. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  13. Gabriel Perez-Quiros & Margaret M. McConnell, 2000. "Output Fluctuations in the United States: What Has Changed since the Early 1980's?," American Economic Review, American Economic Association, vol. 90(5), pages 1464-1476, December.
  14. Joseph Stiglitz, 1997. "Reflections on the Natural Rate Hypothesis," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 3-10, Winter.
  15. Fosu, Augustin Kwasi & Huq, Shamsul, 1988. "Price inflation and wage inflation : A cause-effect relationship?," Economics Letters, Elsevier, vol. 27(1), pages 35-40.
  16. James H. Stock & Mark W. Watson, 2008. "Phillips curve inflation forecasts," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 53.
  17. Taylor, John B, 1980. "Aggregate Dynamics and Staggered Contracts," Journal of Political Economy, University of Chicago Press, vol. 88(1), pages 1-23, February.
  18. Yun, Tack, 1996. "Nominal price rigidity, money supply endogeneity, and business cycles," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 345-370, April.
  19. Jordi Galí & Mark Gertler, 1998. "Inflation dynamics: A structural econometric analysis," Economics Working Papers 341, Department of Economics and Business, Universitat Pompeu Fabra.
  20. Mehra Yash P, 2004. "The Output Gap, Expected Future Inflation and Inflation Dynamics: Another Look," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-19, December.
  21. Yash P. Mehra, 2004. "The output gap, expected future inflation and inflation dynamics: another look," Working Paper 04-06, Federal Reserve Bank of Richmond.
  22. repec:fip:fedcpd:y:2000:i:apr:p:1-14:n:1 is not listed on IDEAS
  23. Matthias Doepke & Martin Schneider, 2006. "Inflation and the Redistribution of Nominal Wealth," Journal of Political Economy, University of Chicago Press, vol. 114(6), pages 1069-1097, December.
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