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Why does the cyclical behavior of real wages change over time?

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

Suggested Citation

  • Kevin X. D. Huang & Zheng Liu & Louis Phaneuf, 2002. "Why does the cyclical behavior of real wages change over time?," Research Working Paper RWP 02-09, Federal Reserve Bank of Kansas City.
    • Handle: RePEc:fip:fedkrw:rwp02-09
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    References listed on IDEAS

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