Economy Experts: What Role Have Sticky Wages And Prices Played? http://economy.nationaljournal.com/2009/03/what-role-have-sticky-wages-an.php?rss=1 en Copyright 2009 Mon, 02 Mar 2009 13:30:00 GMT http://www.sixapart.com/movabletype/ http://www.rssboard.org/rss-specification What Role Have Sticky Wages And Prices Played? How much of a factor in the downturn have been sticky wages and prices? Can you point to sticky wages affecting the level of employment in particular industries, or sticky prices further dampening demand for some goods and services? Is there anything that government could do to effectively unstick wages or prices? Does the incidence of stickiness indicate that unionization (which is at historically low levels) isn't as much of a factor in sticky wages as once thought?

-- John Maggs, NationalJournal.com

]]> http://economy.nationaljournal.com/2009/03/what-role-have-sticky-wages-an.php?rss=1 http://economy.nationaljournal.com/2009/03/what-role-have-sticky-wages-an.php?rss=1 Mon, 02 Mar 2009 13:30:00 GMT James K. Galbraith responded on March 10, 09 02:57 PM <div class="ad" style="float:right;margin: 0px, 0, 10, 10;"> <h6>Advertisement</h6> <a href="http://ad.doubleclick.net/jump/nationaljournalgroup/njonline;feature=expertblogs;series=economy;medium=rss;sz=300x250;ord=123456789?" target="_blank"><img src="http://ad.doubleclick.net/ad/nationaljournalgroup/njonline;feature=expertblogs;series=economy;medium=rss;tile=2;sz=300x250;ord=123456789?" width="300" height="250" border="0" alt=""></a> </div> Litan makes a point: this topic will provide future employment to economists.

Otherwise, to say that sticky wages (or prices) play a role in unemployment is a bit like blaming gravity for the collapse of a bridge.   It's not of any use to the civil engineers.

 

...]]> http://economy.nationaljournal.com/2009/03/what-role-have-sticky-wages-an.php?rss=1#1306554 http://economy.nationaljournal.com/2009/03/what-role-have-sticky-wages-an.php?rss=1#1306554 Tue, 10 Mar 2009 18:57:01 GMT Robert Litan responded on March 2, 09 10:11 AM <div class="ad" style="float:right;margin: 0px, 0, 10, 10;"> <h6>Advertisement</h6> <a href="http://ad.doubleclick.net/jump/nationaljournalgroup/njonline;feature=expertblogs;series=economy;medium=rss;sz=300x250;ord=123456789?" target="_blank"><img src="http://ad.doubleclick.net/ad/nationaljournalgroup/njonline;feature=expertblogs;series=economy;medium=rss;tile=2;sz=300x250;ord=123456789?" width="300" height="250" border="0" alt=""></a> </div> My impression from anecdotal reports -- in the media and in personal conversations -- is that employers are more willing to offer wage cuts in lieu of layoffs, and employees more willing to accept them, in this downturn than in any previous recession of my lifetime. To the extent this occurs, this will mitigate an otherwise horrific decline in employment. In future years, I suspect there will be a number of economists who will be sifting through the data to whether and to what extent wage cutting in fact has happened.

...]]> http://economy.nationaljournal.com/2009/03/what-role-have-sticky-wages-an.php?rss=1#1301121 http://economy.nationaljournal.com/2009/03/what-role-have-sticky-wages-an.php?rss=1#1301121 Mon, 02 Mar 2009 15:11:30 GMT