The Linkage between Prices, Wages, and Labor Productivity: A Panel Study of Manufacturing Industries
AbstractThis article investigates the long-run relationship between prices and wage-adjusted productivity as well as between real wages and average labor productivity at the industry level for a panel of 459 U.S. manufacturing industries over the period 1956–1996. Panel cointegration test results strongly reject the null of no cointegration in the panel between both prices and wage-adjusted productivity and between labor productivity and real wages for many (but not all) industries. Granger-causality tests show that prices are weakly exogenous and cause movements in unit labor cost. Bidirectional Granger causality is found between real wages and productivity; however, a one-to-one relationship is strongly rejected between real wages and productivity. Increases in labor productivity are associated with a less than unity increase in real wages.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 70 (2004)
Issue (Month): 4 (April)
Find related papers by JEL classification:
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Raffaello Bronzini & Paolo Piselli, 2006. "Determinants of long-run regional productivity: the role of R&D, human capital and public infrastructure," Temi di discussione (Economic working papers) 597, Bank of Italy, Economic Research and International Relations Area.
- Josheski, Dushko & Bardarova, Snezana, 2013.
"Causal relationship between wages and prices in R. Macedonia: VECM analysis,"
48179, University Library of Munich, Germany.
- Josheski, Dushko & Bardarova, Snezana, 2013. "Causal relationship between wages and prices in R. Macedonia: VECM analysis," EconStor Preprints 77910, ZBW - German National Library of Economics.
- Saten Kumar & Don J. Webber & Geoff Perry, 2012.
"Real wages, inflation and labour productivity in Australia,"
Taylor & Francis Journals, vol. 44(23), pages 2945-2954, August.
- Saten Kumar & Don J. Webber & Geoff Perry, 2009. "Real wages, inflation and labour productivity in Australia," Working Papers 0921, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
- Kumar, Saten & Webber, Don J. & Perry, Geoff, 2009. "Real Wages, Inflation and Labour Productivity in Australia," MPRA Paper 19293, University Library of Munich, Germany.
- Josheski, Dushko & Lazarov, Darko & Fotov, Risto & Koteski, Cane, 2011. "Causal relationship between wages and prices in UK: VECM analysis and Granger causality testing," MPRA Paper 34095, University Library of Munich, Germany.
- Dierk Herzer & Stephan Klasen & Felicitas Nowak-Lehmann D., 2006.
"In search of FDI-led growth in developing countries,"
Ibero America Institute for Econ. Research (IAI) Discussion Papers
150, Ibero-America Institute for Economic Research.
- Klasen, Stephan & Herzer, Dierk & Nowak-Lehmann D., Felicitas, 2007. "In search of FDI-led growth in developing countries," Proceedings of the German Development Economics Conference, GÃ¶ttingen 2007 14, Verein für Socialpolitik, Research Committee Development Economics.
- Schreiber, Sven, 2013. "(When) does money growth help to predict Euro-area inflation at low frequencies?," Discussion Papers 2013/10, Free University Berlin, School of Business & Economics.
- Bronzini, Raffaello & Piselli, Paolo, 2009. "Determinants of long-run regional productivity with geographical spillovers: The role of R&D, human capital and public infrastructure," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 187-199, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini).
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.