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Wage Rigidity: Measurement, Causes and Consequences


  • Lorenz Goette
  • Uwe Sunde
  • Thomas Bauer


Wage rigidity - the observation that wages cannot be adjusted downwards - has important implications for labour markets and macroeconomic performance. Empirical evidence on the extent, causes and consequences of wage rigidity on the individual level is relatively scant, however. This Feature presents articles that apply a new methodology to estimate the incidence and extent of nominal and real wage rigidity among the employed in three major European countries (Germany, Italy and Great Britain). The results document the pervasiveness of nominal and, particularly, real wage rigidity in different institutional and economic environments, and a recent decline in real wage rigidity. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007.

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  • Lorenz Goette & Uwe Sunde & Thomas Bauer, 2007. "Wage Rigidity: Measurement, Causes and Consequences," Economic Journal, Royal Economic Society, vol. 117(524), pages 499-507, November.
  • Handle: RePEc:ecj:econjl:v:117:y:2007:i:524:p:f499-f507

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