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Cointegration and Structure in Norwegian Wage–Price Dynamics

Author

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  • Marit Gjelsvik

    (Statistics Norway, Research Department, Postboks 2633 St.Hanshaugen, NO-0131 Oslo, Norway)

  • Ragnar Nymoen

    (Department of Economics, University of Oslo, Postboks 1095 Blindern, NO-0317 Oslo, Norway)

  • Victoria Sparrman

    (Statistics Norway, Research Department, Postboks 2633 St.Hanshaugen, NO-0131 Oslo, Norway)

Abstract

Wage coordination plays an important role in macroeconomic stabilization. Pattern wage bargaining systems have been common in Europe, but in different forms, and with different degrees of success in terms of actual coordination reached. We focus on wage formation in Norway, a small open economy, where it is custom to regard the manufacturing industry as the wage leader. We estimate a model of wage formation in manufacturing and in two other sectors. Deciding cointegration rank is an important step in the analysis, economically as well statistically. In combination with simultaneous equation modelling, the cointegration analysis provides evidence that collective wage negotiations in manufacturing have defined wage norms for the rest of the economy over the period 1980(1)–2014(4).

Suggested Citation

  • Marit Gjelsvik & Ragnar Nymoen & Victoria Sparrman, 2020. "Cointegration and Structure in Norwegian Wage–Price Dynamics," Econometrics, MDPI, vol. 8(3), pages 1-15, July.
    • Handle: RePEc:gam:jecnmx:v:8:y:2020:i:3:p:29-:d:390332
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