The oil crises: The reason for Finnish stagflation
In this article Michael Bruno and Jeffrey Sachs' theOrY of stagflation in the 1970's is evaluated with regard to Finland. They argue that a rise in the price of energy and raw materials together with real wage rigidity caused profit rates and demand for labour to fall. Theoretical and empirical arguments concerning the validity of Bruno and Sachs' theory are dealt with. The results of a wage equation study show some negative response in real wages when the price of materials rises.
Volume (Year): 2 (1989)
Issue (Month): 2 (Autumn)
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- Hall, S G, 1986. "An Application of the Granger & Engle Two-Step Estimation Procedure to United Kingdom Aggregate Wage Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 229-39, August.
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- Engle, Robert F. & Yoo, Byung Sam, 1987. "Forecasting and testing in co-integrated systems," Journal of Econometrics, Elsevier, vol. 35(1), pages 143-159, May.
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