This paper demonstrates, contrary to what has been shown recently, that demand pressure, besides cost-pressure, matters both in the labor market and the market for goods in the determination of wage and price inflation. We consider and estimate both wage and price Phillips-curves for the U.S., using OLS and nonparametric estimation techniques. The finding is that on the whole wages are more fle...

As a consequence of falling relative demand for low skilled labor in the OECD, people with no or minor qualification experience a deterioration of their economic situation. While flexible labor markets have led to higher wage differentials in the USA, the major problem of most European countries is the high rate of unemployment of the low skilled. To integrate currently discussed determinants o...

Wage-Hours Contracts, Overtime Working and Premium Pay This paper offers a contract-based theory to explain the determination of standard hours, overtime hours and overtime premium pay. We expand on the wage contract literature that emphasises the role of firm-specific human capital and that explores problems of contract efficiency in the face of information asymmetries between the firm and the...

This paper shows that switching the dominant use of household-specific sticky wages in the New Keynesian model (Erceg, Henderson, and Levin 2000) for firm-specific sticky wages has qualitative and quantitative consequences. First, the model with firm-specific sticky wages incorporates endogenous changes in the rate of unemployment, whereas there is no unemployment with household-specific sticky...

The Role of Profit Sharing in Dual Labour Markets with Flexible Outsourcing We combine profit sharing for high-skilled workers and outsourcing of low-skilled tasks in partly imperfect dual domestic labour markets, when the wage rate for low-skilled worker is set by a labor union, to analyze how the implementation of profit sharing influence flexible outsourcing and low-skilled labour market out...

This paper demonstrates, contrary to what has been shown recently, that demand pressure, besides differentiated cost-pressure, matters both in the labor market and the market for goods in the determination of wage and price inflation. We consider from the theoretical perspective and estimate for the USA, using OLS and more advanced methods, both separately and simultaneously wage and price Phil...

This paper implements a fair wage constraint in the fashion of Akerlof and Yellen (1990) into an analytically tractable core-periphery agglomeration model. This enables us to study the role of imperfect labour markets for the pattern of agglomeration. We illustrate that, in the short run, a marginal increase in fair wage preferences leads to an unambiguous compression of the national factor pri...

This paper undertakes an exploratory analysis of the inflationary dynamics within the Croatian economy over the period January 1992 December 1999. Recognizing the structural break in the inflationary process corresponding to the anti-inflationary stabilization program of October 1993, the analysis proceeds by estimating an augmented vector autoregressive (VAR) model of the log first-differences...

In this study we investigate the minimum wage (MW) effects for a German sub-construction sector where the MW bites extraordinary hard by international standards. Within a quasiexperiment we estimate the Quantile Treatment Effects of the MW on the conditional and unconditional distribution of earnings. For Eastern Germany, the results indicate significant real (nominal) wage increases that rippl...

This paper discusses the endeavours of policy makers to come to some degree of wage coordination among EU countries, aiming at aligning nominal wage growth with labour productivity growth at the national levels. In this context, we analyse the nominal wage and productivity developments in Germany, the European Union’s periphery countries Greece, Ireland, Portugal, and Spain along with the US fo...