Changes in the Cyclical Sensitivity of Wages in the United States, 1891-1987
AbstractThe conventional wisdom that nominal wages became less sensitive to the business cycle and more autocorrelated after World War II is reexamined here by considering whether these properties are artifacts of the methods used to construct prewar wage series. A replication based on these methods is more cyclically sensitive and exhibits less autocorrelation than the postwar data. Aggregation using variable instead of fixed employment weights also greatly exaggerates the cyclicality of prewar wages. These biases imply that wages are just as sensitive to the cycle today as 100 years ago, perhaps even more so.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3854.
Date of creation: Sep 1991
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Allen, Steven G, 1992. "Changes in the Cyclical Sensitivity of Wages in the United States, 1891-1987," American Economic Review, American Economic Association, vol. 82(1), pages 122-40, March.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Walter Y. Oi, 1976.
"On Measuring the Impact of Wage-Price Controls: A Critical Appraisal,"
425, Princeton University, Department of Economics, Industrial Relations Section..
- Oi, Walter Y., 1976. "On measuring the impact of wage-price controls: A critical appraisal," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 2(1), pages 7-64, January.
- John B. Taylor, 1988.
"Improvements in Macroeconomic Stability: The Role of Wages and Prices,"
NBER Working Papers
1491, National Bureau of Economic Research, Inc.
- John B. Taylor, 1986. "Improvements in Macroeconomic Stability: The Role of Wages and Prices," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 639-678 National Bureau of Economic Research, Inc.
- Santomero, Anthony M & Seater, John J, 1978. "The Inflation-Unemployment Trade-off: A Critique of the Literature," Journal of Economic Literature, American Economic Association, vol. 16(2), pages 499-544, June.
- Charles L. Schultze, 1981. "Some Macro Foundations for Micro Theory," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(2), pages 521-592.
- Olivier J. Blanchard & Lawrence H. Summers, 1987.
"Hysteresis and the European Unemployment Problem,"
NBER Working Papers
1950, National Bureau of Economic Research, Inc.
- J. Bradford De Long & Lawrence H. Summers, 1986.
"The Changing Cyclical Variability of Economic Activity in the United States,"
NBER Working Papers
1450, National Bureau of Economic Research, Inc.
- J. Bradford DeLong & Lawrence H. Summers, 1986. "The Changing Cyclical Variability of Economic Activity in the United States," NBER Chapters, in: The American Business Cycle: Continuity and Change, pages 679-734 National Bureau of Economic Research, Inc.
- G. Warren Nutter & Israel Borenstein & Adam Kaufman, 1962. "Growth of Industrial Production in the Soviet Union," NBER Books, National Bureau of Economic Research, Inc, number nutt62-1.
- Romer, Christina, 1986. "Spurious Volatility in Historical Unemployment Data," Journal of Political Economy, University of Chicago Press, vol. 94(1), pages 1-37, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.