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The Wage Price Spiral / Olivier J. Blanchard.
- Format:
- Book
- Author/Creator:
- Blanchard, Olivier J.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w1771.
- NBER working paper series no. w1771
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1985.
- Summary:
- This paper rehabilitates the old wage price spiral. It shows that, after an increase in aggregate demand, the process of adjustment of nominal prices and nominal wages results from attempts by workers to maintain or increase their real wage and by firms to maintain or increase their markups of prices over wages. Under continuous price and wage setting, the process of adjustment would be instantaneous ; under staggering of price and wage decisions, the adjustment takes time. The more inflexible real wages and markups are to shifts in demand, the higher is the degree of price level inertia, the longer lasting are the effects of aggregate demand on output.
- Notes:
- Print version record
- December 1985.
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