E-ISSN 2791-9439 | ISSN 1300-1868
 

Original Article 


AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009)

Leyla BAŞTAV.

Abstract
The study aims to analyze US economy for the term 1990-2009 with emphasis on price formation and provide evidence on the mechanism through which business cycles occur. According to New Keynesian thinking major structural trait of the economy is non-clearing markets under imperfect competition with asymmetry and uncertainties. Generally empirical evidence is quite scarce in NK literature whereas theoretical research is abundant. Recent empirical research in the field has revealed evidence in favor of wage rigidity in developed economies. In this study econometric estimation of six equations on price formation has also revealed evidence for wage rigidity in the form of “inertia”. Inertia may be either due to expectations” or presence of “staggered wage contracts”. Thus we conclude that business cycle dynamics of fluctuations in output and employment should be followed in the labor markets and relevant models of the economy should concentrate on them to explain dynamics.

Key words: New Keynesian economics, business cycles, price rigidities, macroeconomic modelling, labor market structure. JEL Classification: E12, E31, E32.



ABD Ekonomisinde Ücret ve Fiyat Yapışkanlığı Üzerine Ampirik Bir Çalışma (1990-2009)

Ozet
Çalışmanın amacı ABD ekonomisini 1990-2009 döneminde fiyat oluşum mekanizmaları çerçevesinde analiz ederek ekonomik dalgalanmaları ortaya çıkaran mekanizmalar hakkında belirlemelerde bulunmaktır. Yeni Keynesyen görüşe göre ekonomilerde temel özellik asimetri ve belirsizliklerin bulunduğu aksak rekabetçi yapıda piyasaların tam rekabetçi dengeye ulaşamamasıdır. Yeni Keynesyen görüşe ilişkin fazlasıyla teorik yaklaşım varken bu alandaki ampirik çalışmalar yetersiz bulunmaktadır. Son dönemlerde bu alanda gerçekleştirilen ampirik araştırmalarda gelişmiş ülkelerde ücret katılığı tespit edilmiştir. Bu çalışmada da altı fiyat denkleminin ekonometrik tahmini ile “atalet” şeklinde fiyat katılığının bulunduğu ortaya çıkmıştır. Atalet “beklentiler” veya “farklı vadelerde yenilenen ücret anlaşmalarının ” varlığına bağlı olarak görülebilir. Böylece, üretim ve istihdamdaki ekonomik dalgalanmaların çıkış dinamiği işgücü piyasalarından araştırılmalı ve ekonomik modellerde bu piyasalara yoğunlaşılmalıdır.

Anahtar Kelimeler: Yeni Keynesyen ekonomi, ekonomik dalgalanmalar, fiyat katılıkları, makroekonomik modeileme, işgücü piyasalarının yapısı. JEL Sınıflaması: E12, E31, E32.


 
ARTICLE TOOLS
Abstract
PDF Fulltext
How to cite this articleHow to cite this article
Citation Tools
Related Records
 Articles by Leyla BAŞTAV
on Google
on Google Scholar


REFERENCES
AKERLOF G.A., YELLEN J. (1985), “A Near-Rational Model of the Business Cycle, with Wage and Price Inertia”, The Quarterly Journal o f Economics,100 (Supplement), 823-838.
ALVES, N. (2004), “Nominal Wage Inertia In General Equilibrium Models”, Banco de Portugal Economic Research Department, WP 15-04 September 2004.
BARATTIERI A., BASU, S., GOTTSCHALK, P. (2010), “Some Evidence on the Importance of Sticky Wages”, NBER Working PaperNo. 16130.
BERNANKE, B.S., CAREY, K. (1996), “Nominal Wage Stickiness and Aggregate Supply in the Great Depression”, NBER Working PaperNo. 5439.
BILLS, M., KLENOW P.J. (2002), “Some Evidence on the Importance of Sticky Wages” NBER Working PaperNo. 9069.
BORDO, M.D., ERCEG, C.J., EVANS C.L. (2000), “Money, Sticky Wages and the Great Depression” American EconomicReview,Vol. 90, No. 5, 1447-1463.Bureau of Labor Statistics (BLS), www.bls.gov (February 2012).Bureau of Economic Analysis (BEA), www.bea.gov (February 2012).
CHARI, V.V., KEHOE P.J., McGRATTAN, E.R. (2000), “Sticky Price Models of the Business Cycle: Can the Contract Multiplier Solve the Persistence Problem?” Federal Reserve Bank o f Minneapolis Research Department Staff Report217/JV.
CHARI, V.V., KEHOE P.J., McGRATTAN, E.R. (2002), “Business Cycle Accounting”, Federal Reserve Bank o f Minneapolis Research DepartmentWorking Paper 625.
CHRISTIANO, L.J., EICHENBAUM M., EVANS, C. L. (2005), “Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy”, The Journal o fPolitical Economy, Vol. 113, No. 1, 1-45
GORDON, R.J. (1981), “Price Inertia and Policy Ineffectiveness in the United States. 1890-1980” NBER Working PaperNo. 744.
GORDON, R.J. (1990), “What Is New Keynesian Economics?” Journal o fEconomic Literature,Vol. 28, September, 1115-71.
GORDON, R.J. (2003), Macroeconomics,Boston: Addison Wesley.
GREENWALD, B., STIGLITZ, J. (1993), “New and Old Keynesians”, Journal o f Economic Perspectives, Vol. 7, Winter, 23-44.
HUANG, K.X.D., LIU Z., (2002), “Staggered Price-Setting, Staggered Wage-Setting and Business Cycle Persistence”, Journal o f Monetary Economics,Vol. 49, No. 405-433.
LUCAS, R.E. Jr. (1973), “Some International Evidence on Output-Inflation Tradeoffs” American Economic Review,Vol. 63, No. 3, 326-334.
MANKIW, N.G. (1985), “Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly” Quarterly Journal o f Economics, Vol. 100, No. 2, 529-538.
MANKIW, N.G. (1990), “A Quick Refresher Course in Macroeconomics” Journal o f Economic Literature, Vol. 28, December, 1645-1660.
MANKIW, N.G. (1991), Comment on J.J. Rotenberg and M. Woodford “Markups and the Business Cycle”, NBER Macroeconomics Annual.
MANKIW, N.G. (1992), “The Reincarnation of Keynesian Economics”European Economic Review, Vol. 36, April, 559-65.
MANKIW, N.G., ROMER, D. (Eds.) (1991), New Keynesian Economics(2 vols), Cambridge, MA: MIT Press.
SNOWDON, B., VANE, H.R. (1995), “New Keynesian Economics Today: The Empire Strikes Back”, The American Economist, Vol. 39, No. 1, 48-65.
SNOWDON, B., VANE, H.R. (2005), Modern Macroeconomics: Its Origins,Development and Current State. Cheltenham UK: Edward Elgar Publishing Limited.
TAYLOR, J.B. (1980), “Aggregate Dynamics and Staggered Contracts” TheJournal o f Political Economy, Vol. 88, No. 1, 1-23.
TAYLOR, J.B. (1999), Staggered Price and Wage Setting in Macroeconomics. In J.B.Taylor & M. Woodford (Eds.), Handbook o fMacroeconomics(Vol. 1, 1009-1050), Amsterdam: Elsevier B.V.

How to Cite this Article
Pubmed Style

Leyla BAŞTAV. AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009). Ekonomik Yaklasim. 2011; 22(81): 45-64. doi:10.5455/ey.20017


Web Style

Leyla BAŞTAV. AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009). https://www.ekonomikyaklasim.org/?mno=34397 [Access: April 10, 2023]. doi:10.5455/ey.20017


AMA (American Medical Association) Style

Leyla BAŞTAV. AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009). Ekonomik Yaklasim. 2011; 22(81): 45-64. doi:10.5455/ey.20017



Vancouver/ICMJE Style

Leyla BAŞTAV. AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009). Ekonomik Yaklasim. (2011), [cited April 10, 2023]; 22(81): 45-64. doi:10.5455/ey.20017



Harvard Style

Leyla BAŞTAV (2011) AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009). Ekonomik Yaklasim, 22 (81), 45-64. doi:10.5455/ey.20017



Turabian Style

Leyla BAŞTAV. 2011. AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009). Ekonomik Yaklasim, 22 (81), 45-64. doi:10.5455/ey.20017



Chicago Style

Leyla BAŞTAV. "AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009)." Ekonomik Yaklasim 22 (2011), 45-64. doi:10.5455/ey.20017



MLA (The Modern Language Association) Style

Leyla BAŞTAV. "AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009)." Ekonomik Yaklasim 22.81 (2011), 45-64. Print. doi:10.5455/ey.20017



APA (American Psychological Association) Style

Leyla BAŞTAV (2011) AN EMPIRICAL STUDY ON THE WAGE AND PRICE STICKINESS OF US ECONOMY (1990-2009). Ekonomik Yaklasim, 22 (81), 45-64. doi:10.5455/ey.20017





Most Viewed Articles
  • Ulusların Düşüşü - Güç, Zenginlik ve Yoksulluğun Kökenleri
    Why Nations Fail - The Origins of Power, Prosperity and Poverty [Turkish]
    Gönül DİNÇER
    Ekonomik Yaklasim. 2014; 25(93): 65-76
    » Abstract & References » doi: 10.5455/ey.35517

  • DOSTOYEVSKİ'NİN İKTİSADİ YAKLAŞIMI VE İKTİSADİ AKLIN ELEŞTİRİSİ
    Dostoevsky’s Approach to Economics and Critique of the Economic Man [Turkish]
    Ceyhun GÜRKAN, Mustafa ÖZİŞ
    Ekonomik Yaklasim. 2012; 23(82): 99-128
    » Abstract & References » doi: 10.5455/ey.20004

  • BÜTÇE AÇIKLARININ CARİ İŞLEMLER DENGESİ ÜZERİNE ETKİLERİ: İKİZ AÇIKLAR HİPOTEZİNİN TÜRKİYE AÇISINDAN DEĞERLENDİRİLMESİ
    Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey [Turkish]
    Metin BAYRAK; Ömer ESEN
    Ekonomik Yaklasim. 2012; 23(82): 23-49
    » Abstract & References » doi: 10.5455/ey.20001

  • TÜRKİYE'DE KAMU SEKTÖRÜ BÜYÜKLÜĞÜ VE EKONOMİK BÜYÜME İLİŞKİSİNİN AMPİRİK ANALİZİ
    An Empirical Analysis on the Relationship between Public Sector Size and Economic Growth in Turkey [Turkish]
    Ömer Faruk ALTUNÇ, Celil AYDIN
    Ekonomik Yaklasim. 2012; 23(82): 79-98
    » Abstract & References » doi: 10.5455/ey.20003

  • TÜRKİYE EKONOMİSİ İÇİN NAIRU TAHMİNİ
    NAIRU Estimation for the Turkish Economy [Turkish]
    Özlem YİĞİT; Atilla GÖKÇE
    Ekonomik Yaklasim. 2012; 23(83): 69-91
    » Abstract & References » doi: 10.5455/ey.34098

  • Most Downloaded
  • Küresel Dengesizlikler ve Kriz Tartışması Işığında Cari Denge ve Sermaye Hesabını Anlamak
    Understanding Developments in Current Accounts and Financial Flows in Light of Discussions on Global Imbalances and Recent Crises [Turkish]
    Hasan Cömert, Güney Düzçay
    Ekonomik Yaklasim. 2015; 26(96): 59-90
    » Abstract & References » doi: 10.5455/ey.35901

  • TEKNOLOJi TRANSFERi VE GELiŞMEKTE OLAN ÜLKELERiN REKABET GÜCÜ
    English Title Not Available [Turkish title: TEKNOLOJi TRANSFERi VE GELiŞMEKTE OLAN ÜLKELERiN REKABET GÜCÜ] [Turkish]
    Refik ÜREYEN, Metin DURGUT, Müfit AKYOS, Oğuz KARAKOÇ
    Ekonomik Yaklasim. 2003; 14(47 - Proceedings): 69-92
    » Abstract & References » doi: 10.5455/ey.10379

  • Uluslararası Finansal Krizler
    English title is not available [Turkish title: Uluslararası Finansal Krizler] [Turkish]
    Veysel Çalışkan
    Ekonomik Yaklasim. 2003; 14(49 - Proceedings): 225-240
    » Abstract & References » doi: 10.5455/ey.10403

  • XVII. YÜZYILDA OSMANLILAR VE MERKANTİLİSTLER
    English Title Not Available [Turkish Title:XVII. YÜZYILDA OSMANLILAR VE MERKANTİLİSTLER] [Turkish]
    Mehmet BULUT
    Ekonomik Yaklasim. 2000; 11(39): 23-35
    » Abstract & References » doi: 10.5455/ey.10334

  • Sürdürülebilirlik Üzerine Tarihsel ve Güncel Bir Perspektif
    A Historical and Current Perspective on Sustainability [Turkish]
    Hüseyin Şen, Ayşe Kaya, Barış Alpaslan
    Ekonomik Yaklasim. 2018; 29(107): 1-47
    » Abstract » doi: 10.5455/ey.39101

  • Most Cited Articles
  • [Türkçe Başlık Yok]
    TOURISM AND ECONOMIC GROWTH IN TURKEY [English]
    Jülide Yıldırım Öcal, Nadir Öcal
    Ekonomik Yaklasim. 2004; 15(52-53): 131-141
    » Abstract & References » doi: 10.5455/ey.10503
    Cited : 17 times [Click to see citing articles]

  • Sürdürülebilirlik Üzerine Tarihsel ve Güncel Bir Perspektif
    A Historical and Current Perspective on Sustainability [Turkish]
    Hüseyin Şen, Ayşe Kaya, Barış Alpaslan
    Ekonomik Yaklasim. 2018; 29(107): 1-47
    » Abstract » doi: 10.5455/ey.39101
    Cited : 11 times [Click to see citing articles]

  • TEŞVİKLERİN BÖLGESEL EKONOMİK BÜYÜME ÜZERİNDEKİ ETKİSİ: AMPİRİK BİR ANALİZ
    The Impact of Investment Incentives on Regional Economic Growth: An Empirical Analysis [Turkish]
    Nuri YAVAN
    Ekonomik Yaklasim. 2011; 22(81): 65-104
    » Abstract & References » doi: 10.5455/ey.20018
    Cited : 9 times [Click to see citing articles]

  • Türkiye'de İklim Değişikliğinin Buğday Verimi Üzerine Etkileri: Bir Heterojen Panel Çalışması
    Impacts of Climate Change on Wheat Yield in Turkey: A Heterogeneous Panel Study [Turkish]
    Ozan Eruygur, Selin Özokcu
    Ekonomik Yaklasim. 2016; 27(101): 219-255
    » Abstract & References » doi: 10.5455/ey.35944
    Cited : 9 times [Click to see citing articles]

  • İKİZ AÇIKLAR HİPOTEZİ (TÜRKİYE UYGULAMASI)
    English Title Not Available [Turkish Title:İKİZ AÇIKLAR HİPOTEZİ (TÜRKİYE UYGULAMASI)] [Turkish]
    Ahmet ZENGİN
    Ekonomik Yaklasim. 2000; 11(39): 37-67
    » Abstract & References » doi: 10.5455/ey.10335
    Cited : 8 times [Click to see citing articles]