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Price and Wage Setting in Japan: An Empirical Investigation

Author

Listed:
  • Shigeyuki Hamori

    () (Kobe University)

  • Takeshi Hoshikawa

    () (Kinki University)

  • Junya Masuda

    () (Mitsubishi Research Institute)

  • Kunihiro Hanabusa

    () (Kobe University)

Abstract

This paper empirically analyzes whether a hypothesis from Aukrust (1977) applies to two phenomena in Japan: wage spillover between internationally competitive industries (exposed sectors) and domestically protected industries (sheltered sectors), and wage- and price- setting in those industries. We find that Aukrust's assumptions hold in the case of Japan, as all three of the cointegrating relations assumed by the Aukrust model are confirmed to exist. We also find the causal relations in Japan are more complex than the relations assumed by Aukrust.

Suggested Citation

  • Shigeyuki Hamori & Takeshi Hoshikawa & Junya Masuda & Kunihiro Hanabusa, 2009. "Price and Wage Setting in Japan: An Empirical Investigation," Economics Bulletin, AccessEcon, vol. 29(1), pages 38-50.
  • Handle: RePEc:ebl:ecbull:eb-08f40028
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I1-P3.pdf
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    References listed on IDEAS

    as
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    3. Elliott, Graham, 1999. "Efficient Tests for a Unit Root When the Initial Observation Is Drawn from Its Unconditional Distribution," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 767-783, August.
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    5. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    6. Perron, Pierre & Rodriguez, Gabriel, 2003. "GLS detrending, efficient unit root tests and structural change," Journal of Econometrics, Elsevier, vol. 115(1), pages 1-27, July.
    7. Jacobson, Tor & Ohlsson, Henry, 1994. "Long-Run Relations between Private and Public Sector Wages in Sweden," Empirical Economics, Springer, vol. 19(3), pages 343-360.
    8. Holmlund, B. & Ohlsson, H., 1990. "Wage Linkages Between Private and Public Sectors," Papers 1990t, Uppsala - Working Paper Series.
    9. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
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    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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