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Uncertainty and labor contract durations

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  • Robert W. Rich
  • Joseph Tracy

Abstract

This paper provides an empirical investigation into the relationship between ex ante U.S. labor contract durations and uncertainty over the period 1970 to 1995. We construct measures of inflation uncertainty as well as aggregate nominal and real uncertainty. The results not only corroborate previous findings of an inverse relationship between contract durations and inflation uncertainty, but also document that this relationship extends to both measures of aggregate uncertainty. We also explore the robustness of this relationship to various measures of inflation uncertainty that have appeared in the literature.

Suggested Citation

  • Robert W. Rich & Joseph Tracy, 2000. "Uncertainty and labor contract durations," Staff Reports 106, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:106
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Labor contract ; Inflation (Finance);

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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