Causes, extent and implications of downwards nominal wage rigidity

Abstract

"In their article, the authors deal with the phenomenon of downwards nominal wage rigidity, one that has remained fairly unaffected by structural change up to now. Because of this, a constant becomes apparent that must be taken into account during discussions on the results of structural change. This is because downwards nominal wage rigidity causes increased unemployment in branches that are declining. The article provides a comprehensive overview of the debate on downwards nominal wage rigidity and inflation. First an explanation is given of how - from a theoretical perspective - a too low inflation in conjunction with nominal wages that are downwardly rigid can increase balanced unemployment. We then investigate possible reasons, the existence and extent as well as the macroeconomic consequences and economic implications."(text excerpt, IAB-Doku) ((en))

Cite article

Beissinger, T. & Stüber, H. (2010): Ursachen, Ausmaß und Implikationen von Abwärtsnominallohnstarrheit. In: U. Blien, W. Flieger & R. Schmitt (Hrsg.) (2010): Ökonomie, Technologie und Region : Voraussetzungen, Formen und Folgen des Strukturwandels. Festschrift für Prof. Dr. Hans-Dieter Feser, p. 259-299.