Journal of Political Economy Vol. 94 No. 3 1986
An Empirical Model of Wage Indexation Provisions in Union Contracts
Abstract
This paper describes the responses of index-linked wage rates to concurrent price increases for a sample of Canadian union contracts and then analyzes theseresponses in terms of a simple model of indexation to the aggregate price level. The model highlights the importance of aggregate price movements in conveying information about industry-specific prices. The empirical analysis confirms that industry-specific correlations between input and output prices and the consumer price index are important determinants of the flexibility of wages to prices across indexed contracts.
- Volume
- 94
- Issue
- 3
- Pages
- S144-S175
- Sources
- bibtex:phds-export.bib