Fixed Wage Contracts and Monetary Non-Neutrality
2016 (English)Report (Other academic)
We study the importance of wage rigidities for the monetary policy transmissionmechanism. Using uniquely rich micro data on Swedish wage negotiations,we isolate periods when the labor market is covered by xed wagecontracts. Importantly, negotiations are coordinated in time but their seasonalpatterns are far from deterministic. Using a VAR model, we documentthat monetary policy shocks have a substantially larger impact on productionduring xed wage episodes as compared to the average response. The resultsare not driven by the periodic structure, nor the seasonality, of the renegotiationepisodes.
Place, publisher, year, edition, pages
Uppsala, 2016. , 30 p.
Working paper / Department of Economics, Uppsala University (Online), ISSN 1653-6975 ; 2016:10
Monetary Policy, Wages, Nominal rigidities, Micro-data
Research subject Economics
IdentifiersURN: urn:nbn:se:uu:diva-301159OAI: oai:DiVA.org:uu-301159DiVA: diva2:953766