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Real Wages and the Business Cycle in Germany

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Author Info

  • Marczak, Martyna

    ()
    (University of Hohenheim)

  • Beissinger, Thomas

    ()
    (University of Hohenheim)

Abstract

This paper establishes stylized facts about the cyclicality of real consumer wages and real producer wages in Germany. As detrending methods we apply the deterministic trend model, the Beveridge-Nelson decomposition, the Hodrick-Prescott filter, the Baxter-King filter and the structural time series model. The detrended data are analyzed both in the time domain and in the frequency domain. The great advantage of an analysis in the frequency domain is that it allows to assess the relative importance of particular frequencies for the behavior of real wages. In the time domain we find that both real wages display a procyclical pattern and lag behind the business cycle. In the frequency domain the consumer real wage lags behind the business cycle and shows an anticyclical behavior for shorter time periods, whereas for longer time spans a procyclical behavior can be observed. However, for the producer real wage the results in the frequency domain remain inconclusive.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5199.

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Length: 37 pages
Date of creation: Sep 2010
Date of revision:
Publication status: published in: Empirical Economics, 2013, 44 (2), 469-490
Handle: RePEc:iza:izadps:dp5199

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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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Keywords: structural time series model; real wages; business cycle; frequency domain; time domain; Germany; trend-cycle decomposition; phase angle;

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References

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Citations

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Cited by:
  1. Marczak, Martyna & Gómez, Victor, 2013. "Monthly US business cycle indicators: A new multivariate approach based on a band-pass filter," FZID Discussion Papers 64-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  2. Marczak, Martyna & Gómez, Víctor, 2012. "Cyclicality of real wages in the USA and Germany: New insights from wavelet analysis," FZID Discussion Papers 50-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).
  3. Marczak, Martyna & Gómez, Víctor, 2012. "SPECTRAN, a set of Matlab programs for Spectral analysis," FZID Discussion Papers 60-2012, University of Hohenheim, Center for Research on Innovation and Services (FZID).

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