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Why Does the Cyclical Behavior of Real Wages Change Over Time?

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  • Kevin X. D. Huang
  • Zheng Liu
  • Louis Phaneuf

Abstract

This paper seeks to understand the evolution of the cyclical behavior of U.S. real wage rates from the interwar period to the post World War II period using a dynamic general equilibrium model that emphasizes demand-driven business cycle fluctuations. In the model, changes in the cyclical behavior of real wages arise endogenously from the interactions between nominal wage and price rigidities and an evolving input-output structure.

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Paper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 0309.

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Date of creation: May 2003
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Handle: RePEc:emo:wp2003:0309

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