Arbeitspapier

Fixed wage contracts and monetary non-neutrality

We study the importance of wage rigidities for the monetary policy transmission mechanism. Using uniquely rich micro data on Swedish wage negotiations, we isolate periods when the labor market is covered by fixed wage contracts. Importantly, negotiations are coordinated in time but their seasonal patterns are far from deterministic. Using a VAR model, we document that monetary policy shocks have a substantially larger impact on production during fixed wage episodes as compared to the average response. The results are not driven by the periodic structure, nor the seasonality, of the renegotiation episodes.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 2016:10

Classification
Wirtschaft
Macroeconomics: Production
Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
Central Banks and Their Policies
Labor Contracts
Subject
Monetary Policy
Wages
Nominal rigidities
Micro-data

Event
Geistige Schöpfung
(who)
Björklund, Maria
Carlsson, Mikael
Nordström Skans, Oskar
Event
Veröffentlichung
(who)
Uppsala University, Department of Economics
(where)
Uppsala
(when)
2016

Handle
URN
urn:nbn:se:uu:diva-301159
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Björklund, Maria
  • Carlsson, Mikael
  • Nordström Skans, Oskar
  • Uppsala University, Department of Economics

Time of origin

  • 2016

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