E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit

• How Rigid Are Nominal-Wage Rates?

  Staff Working Paper 2001-8 Allan Crawford

  This study examines the effect of nominal-wage rigidities on wage growth in Canada using a hazard model and micro data for union contracts. The hazard model is specified in a way that allows considerable flexibility in the shape of the estimated notional wage-change distribution.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation targets, Labour markets JEL Code(s): E, E2, E24, E5, E52, E6, E61

• Downward Nominal-Wage Rigidity: Micro Evidence from Tobit Models

  Staff Working Paper 2001-7 Allan Crawford, Geoff Wright

  This paper uses Tobit models and data for union contracts to examine the extent of downward nominal-wage rigidity in Canada. To be consistent with important stylized facts, the models allow the variance of the notional wage-change distribution to be time-varying and test for menu-cost effects.

  Content Type(s): Staff research, Staff working papers Topic(s): Inflation targets, Labour markets JEL Code(s): E, E2, E24, E5, E52, E6, E61