Modelling Wages and Prices in Australia*

• Autores: Gunnar Bårdsen, Stan Hurn, Zoë Mchugh
• Localización: Economic record, ISSN 0013-0249, Vol. 83, Nº. 261, 2007, págs. 143-158
• Idioma: inglés
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• Resumen

  • This paper estimates a simultaneous-equation model of wages and prices for Australia, underpinned by a competing claims framework of imperfect competition. Two separate co-integrating relationships for wages and prices are identified by imposing the economic hypotheses implied by the theory. The steady-state relationships for wages and prices are then embedded in a parsimonious, dynamic wage-price model. The final model is both simple and parsimonious and able to describe the process of wage and price inflation in Australia.