Nominal Wage Rigidities and the Future Path of Wage Growth

Nominal Wage Rigidities and the Future Path of Wage Growth
by José Mustre-del-Río and Emily Pollard
KansasCityFed, May 10, 2018

 

 

Wage growth has been modest since the end of the Great Recession, puzzling many market observers and policymakers.

We examine the relationship between wage growth and nominal wage rigidities—the share of workers whose wages have not changed—and find the current pace of wage growth is not historically unusual. Our results suggest wage growth may continue on its gradual path as long as the incidence of wage rigidities remains elevated.

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