SSE/EFI Working Paper Series in Economics and Finance
Are Real Wages and Unemployment Related?
(), Anders Vredin
() and Anders Warne
Abstract: In this paper we propose an alternative method for
investigating the sources behind the behavior of real wages and
unemployment. The statistical model we study is a certain structural error
correction model, a so called common trends model, which has become popular
in the empirical growth/business cycle literature. The system consists of
real output, employment, unemployment and the product real wage and two
exogenous stochastic variables, a tax wedge and a currency basket index.
Based on quarterly Swedish data (1965-90) we find evidence supporting a
short run but not a medium or long run relation.
Keywords: Common trends; error correction; supply and demand shocks; (follow links to similar papers)
JEL-Codes: C15; C32; C52; E24; (follow links to similar papers)
48 pages, January 1994
- This paper is published as:
Jacobson, Tor, Anders Vredin and Anders Warne, (1998), 'Are Real Wages and Unemployment Related?', Economica, Vol. 65, pages 69-96
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