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Wage Change and Trade Performance in U.S. Manufacturing Industries


  • Galbraith, James K
  • Calmon, Paulo Du Pin


This paper presents empirical measurement of wage contours in US industry, 1959-88, applying cluster analysis to the path of change of average hourly wages. We define six principal industrial clusters and present simple wage-change equations for each cluster. A series of tests shows that the 'rules of the economic game' differ across our industrial groups: industrial structure matters to wage outcomes. Finally, we present the evolving relationship between relative wage levels and the comparative trade performance of the clusters. The results suggest a strong association between trade performance and the evolving industrial wage structure, contrary to the findings of some other recent studies. We conclude that the reclassification of industrial data along lines specific to the problem being studied is an important analytical step, whose neglect in previous work has led some researchers to understate the influence of industrial structure and trade pressures on wages. (c) 1996 Academic Press Limited Copyright 1996 by Oxford University Press.

Suggested Citation

  • Galbraith, James K & Calmon, Paulo Du Pin, 1996. "Wage Change and Trade Performance in U.S. Manufacturing Industries," Cambridge Journal of Economics, Oxford University Press, vol. 20(4), pages 433-450, July.
  • Handle: RePEc:oup:cambje:v:20:y:1996:i:4:p:433-50

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    References listed on IDEAS

    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters,in: This Time Is Different: Eight Centuries of Financial Folly Princeton University Press.
    2. Christopher Adam & David Vines, 2009. "Remaking macroeconomic policy after the global financial crisis: a balance-sheet approach," Oxford Review of Economic Policy, Oxford University Press, vol. 25(4), pages 507-552, Winter.
    3. Reinhart, Karmen & Rogoff, Kenneth, 2009. ""This time is different": panorama of eight centuries of financial crises," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 1, pages 77-114, March.
    4. Patrick Minford, 2010. "The Banking Crisis: A Rational Interpretation," Political Studies Review, Political Studies Association, vol. 8(1), pages 40-54.
    5. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
    6. Dosi, Giovanni & Fagiolo, Giorgio & Roventini, Andrea, 2010. "Schumpeter meeting Keynes: A policy-friendly model of endogenous growth and business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1748-1767, September.
    7. José Gabriel Palma, 2009. "The revenge of the market on the rentiers," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 829-869, July.
    8. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, June.
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    Cited by:

    1. Vesna Stavrevska, 2011. "The efficiency wages perspective to wage rigidity in the open economy: a survey," International Journal of Manpower, Emerald Group Publishing, vol. 32(3), pages 273-299, June.
    2. Zakhilwal, Omar, 2001. "The Impact of International Trade on the Wages of Canadians," Analytical Studies Branch Research Paper Series 2001156e, Statistics Canada, Analytical Studies Branch.

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