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MONETARY REGIMES AND ENDOGENOUS WAGE CONTRACTS: SWEDEN 1908-1995

Fregert, Klas LU and Jonung, Lars LU (1998)
Abstract
We examine Gray´s theory of endogenous length of wage contracts and inflation indexation, using a uniquely long data set of blue-collar worker collective agreements in Sweden 1908-1995. Volatile monetary regimes, i. e. regimes with large macroeconomic uncertainty, are associated with short length and inflation indexed contracts. We also find inertia in changes in contract characteristics to changes in the regime. The findings support the Lucas critique, but cautions against simple divisions of time series in different regimes wherein agents' decision rules are assumed constant.
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organization
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Working Paper
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published
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keywords
Monetary regime, contract length, wage indexation, Lucas critique
language
English
LU publication?
yes
id
e6b1abd4-82ec-44d2-a382-2e70ac187dc9 (old id 2028937)
date added to LUP
2011-07-25 12:27:20
date last changed
2016-04-16 10:58:27
@misc{e6b1abd4-82ec-44d2-a382-2e70ac187dc9,
  abstract     = {We examine Gray´s theory of endogenous length of wage contracts and inflation indexation, using a uniquely long data set of blue-collar worker collective agreements in Sweden 1908-1995. Volatile monetary regimes, i. e. regimes with large macroeconomic uncertainty, are associated with short length and inflation indexed contracts. We also find inertia in changes in contract characteristics to changes in the regime. The findings support the Lucas critique, but cautions against simple divisions of time series in different regimes wherein agents' decision rules are assumed constant.},
  author       = {Fregert, Klas and Jonung, Lars},
  keyword      = {Monetary regime,contract length,wage indexation,Lucas critique},
  language     = {eng},
  title        = {MONETARY REGIMES AND ENDOGENOUS WAGE CONTRACTS: SWEDEN 1908-1995},
  year         = {1998},
}