Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/1855
Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Real earnings and business cycles: new evidence
Authors: Hart, Robert A
Malley, James R
Woitek, Ulrich
Contact Email: r.a.hart@stir.ac.uk
Keywords: Business cycles
real wages
co-movement
spectral analysis
Issue Date: Sep-2009
Publisher: Springer-Verlag GmbH (Physica Verlag)
Citation: Hart RA, Malley JR & Woitek U (2009) Real earnings and business cycles: new evidence, Empirical Economics, 37 (1), pp. 51-71.
Abstract: In the time domain, the observed cyclical behavior of the real wage hides a range of economic influences that give rise to cycles of differing lengths and strengths. This may serve to produce a distorted picture of wage cyclicality. Here, we deploy frequency domain methods that allow us to asses the relative contribution of cyclical frequency bands on real wage earnings. Earnings are decomposed into standard and overtime components. We also distinguish between consumption and production wages. Frequency domain analysis is carried out in relation to wages alone and to wages in relation to output and employment cycles. Our univariate analysis suggests that, in general, the dominant cycle followed by output, employment, real consumer and producer wages and their componenents is 5-7 years. Consistent with previous findings reported in the macro literature, our bivariate results show that the various measures of the wage are generally not linked to the employment cycle. However, and in sharp contrast with previous macro-studies we find strong procyclical links between the consumer wage and its overtime components and the output cycle, especially at the 5-7 years frequency.
Type: Journal Article
URI: http://hdl.handle.net/1893/1855
DOI Link: http://dx.doi.org/10.1007/s00181-008-0222-1
Rights: Published in Empirical Economics by Springer-Verlag GmbH (Physica Verlag).; The original publication is available at www.springerlink.com
Affiliation: Economics
University of Glasgow
University of Zurich

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