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Wage Bargaining and the Phillips Curve: The Identification and Specification of Aggregate Wage Equations

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  • Alan Manning

Abstract

Most economists believe that wage-setting is very important for understanding macroeconomic behavior, but the form of wage equations commonly estimated suffer from problems of identification. The aim of this paper is to consider whether these problems are inevitable and, if they are not, to suggest ways in whi ch one can estimate structural models of wage-setting. It is argued that if one confines attention to models of wage bargaining t hat are commonly used, identification of the parameters of wage-setting should not be a problem and that the most appropriate form of an aggregate wage equation should be a Phillips Curve. Copyright 1993 by Royal Economic Society.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0062.

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Date of creation: Feb 1992
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Handle: RePEc:cep:cepdps:dp0062

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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