شوک های تقاضا و رفتار ادواری دستمزد واقعی : برخی شواهد بین المللی

The focus of this investigation is on the cyclical response of the real wage to demand shocks. This response differentiates the empirical validity of major New Keynesian explanations of business cycles. The empirical evidence, across industrial countries, highlights a moderate positive correlation between nominal wage and price flexibility in response to various demand shocks. Nonetheless, higher price flexibility moderates the effect of demand shocks on real output, while higher nominal wage flexibility increases, or does not determine, the effects of demand shocks on real output across countries. An increase in the response of the real wage to demand shocks therefore exacerbates their real effect on output, as predicted by sticky-price models. Further, demand shocks do not determine the difference in wage variability. Nominal wage variability increases, in turn, output variability across countries. In contrast, demand shocks differentiate price variability. Price variability moderates, in turn, output variability across countries.

The study of business cycles has been at the heart of macroeconomic theory for decades. Theoretical efforts have focused on providing an adequate explanation for sources of economic fluctuations. New Keynesian models of the last three decades have emphasized rigidity that interferes with market forces and exacerbates the effects of demand fluctuations on the supply side of the economy. The form of rigidity is in sharp contrast between sticky-wage and sticky-price models. Sticky-wage models of the seventies and eighties emphasize the role of contractual agreements in the labor market.1 Given the cost of negotiating contracts, agents opt to change nominal wages at specific intervals. Nominal wage rigidity exacerbates cyclical fluctuations in the face of demand shocks. Specifically, a positive disturbance to aggregate demand decreases the real wage, causing output to rise above its natural (full-equilibrium) level. Accordingly, nominal wage rigidity exacerbates the countercyclical response of the real wage, increasing output fluctuations in the face of demand shocks. Sticky-price models of the eighties emphasize the speed of price adjustment in the product market to explain economic fluctuations.2 Given the cost of adjusting prices, firms opt to change prices at specific intervals. Price rigidity exacerbates cyclical fluctuations in the face of demand shocks. Specifically, constraints on price adjustment prompt producers to expand the output produced in the face of positive demand shocks. Accordingly, price rigidity exacerbates the procyclical response of the real wage, increasing output fluctuations in the face of demand shocks. Researchers have tested these theories. These studies have focused on cyclical fluctuations of the real wage.3 The evidence appears conflicting and, therefore, does not lend support to a given explanation.4 More recent developments in theoretical and empirical studies of New Keynesian macro economics have employed stochastic general equilibrium models (see, e.g., Christiano, Eichenbaum, and Evans 2005, Erceg, Henderson, and Levin 2000, and Smets and Wouters 2003). This paper studies the cyclical behavior of the real wage in response to aggregate demand shocks. The objective is to study the cyclical behavior of the real wage and the relative flexibility of the nominal wage and price. The data under investigation are for nineteen industrial countries. The analysis tests the effect of nominal price and wage rigidities on real magnitudes. In the first step, empirical time-series models are specified and estimated, and the results are compared to theoretical implications. The main upshot is that in a majority of the countries (as well as on average), price flexibility exceeds nominal wage flexibility. In a second step, cross-country differences in the output response to nominal demand shocks are related to differences in estimated measures of stickiness. The overall conclusion is that a high price flexibility relative to nominal wage flexibility contributes to smaller output fluctuations. In a third step of the empirical investigation, the variability of the real wage is broken into a price part and a nominal wage part. The overall evidence across countries indicates that price flexibility to demand shocks, in contrast to wage flexibility, is a major determinant of real wage fluctuations. Accordingly, a high price variability, relative to nominal wage variability, contributes to a smaller output variability. Overall, the combined evidence presents the following conclusion. Nominal wage flexibility in response to demand shocks is pronouncedly less significant compared to price flexibility in determining the variability of the real wage and output across countries. That is, a high price responsiveness to demand shocks tends to be crucial to dampen output fluctuations in a cross-country comparison.

This investigation has focused on the cyclical behavior of the real wage and output fluctuations. Wage rigidity, attributed to explicit or implicit contracts, produces a counter-cyclical response of the real wage that exacerbates output variability. Stickyprice explanations of business cycles establish the source of rigidity in the product market. Faced with menu costs, producers may be reluctant to adjust prices in the short-run, exacerbating output fluctuations. Price rigidity determines, therefore, the pro-cyclical response of the real wage and exacerbates output variability. The empirical investigation has focused on hypotheses that differentiate the validity of the competing explanations of business cycles. Using data for a group of nineteen industrial countries, the time-series evidence highlights nominal wage and price flexibility with respect to aggregate and specific demand shocks. The analysis considers the implications on the cyclical behavior of the real wage and output fluctuations. Nominal wage and price flexibility exhibit some, although moderate, correlation in response to demand shocks. The implication is the real wage may move countercyclically or pro-cyclically with the relative speed of adjusting wages and prices during business cycles. An increase in price flexibility relative to wage flexibility decreases the real wage and moderates output fluctuations during a boom. In contrast, a reduction in the real wage, reflecting more downward rigidity of prices relative to wages, exacerbates output contraction during a downturn. Demand shocks do not differentiate the variability of the nominal wage. It appears, therefore, that nominal wage variability is dominated by supply-side factors. Consequently, output variability increases with the variability of the nominal wage. In contrast, price flexibility with respect to demand shocks differentiates price variability. Accordingly, output variability decreases with respect to price variability across countries. To summarize, across a sample of nineteen industrial countries price flexibility varies independently from conditions in the labor market. This variation determines the cyclical behavior of the real wage and accompanying output fluctuations in sluggishness of price adjustment appears, therefore, more important, compared to nominal wage rigidity, in determining the cyclical behavior of the real wage and output fluctuations across industrial countries.