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Why Does the Cyclical Behavior of Real Wages Change Over Time?

  • Kevin X. D. Huang
  • Zheng Liu
  • Louis Phaneuf

This paper seeks to understand the evolution of the cyclical behavior of U.S. real wage rates from the interwar period to the post World War II period using a dynamic general equilibrium model that emphasizes demand-driven business cycle fluctuations. In the model, changes in the cyclical behavior of real wages arise endogenously from the interactions between nominal wage and price rigidities and an evolving input-output structure.

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File URL: http://economics.emory.edu/home/assets/workingpapers/liu_03_09_paper.pdf
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Paper provided by Department of Economics, Emory University (Atlanta) in its series Emory Economics with number 0309.

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Date of creation: May 2003
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Handle: RePEc:emo:wp2003:0309
Contact details of provider: Web page: http://economics.emory.edu/home/journals/
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