Why US wage and employment behaviour differs from that in Britain and Japan.

Research output: Contribution to journalArticlepeer-review

88 Scopus citations

Abstract

Assumes that rigid wages cannot provide the basis for a universally valid theory of the business cycle, because wages are not universally rigid. Section 1) reviews rigid wage models; II) shows that wage flexibility varies from place to place; III) discusses 'ideal' labour market institutions from the standpoint of macro-economic efficiency; IV) compares actual labour market institutions in USA, Japan and UK; V) concludes that 1) wages in Britain and Japan are 5-10 times more responsive to fluctuations in aggregate nominal demand than in the US; 2) the three-year staggered wage contract in US makes wage changes there unresponsive; 3) Japanese labour market institutions are much more like the 'ideal'.-V.S.Mead

Original languageEnglish (US)
Pages (from-to)13-44
Number of pages32
JournalEconomic Journal
Volume92
Issue number365
DOIs
StatePublished - Jan 1 1982

ASJC Scopus subject areas

  • Economics and Econometrics

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