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Changes in the Cyclical Behavior of Real Wage Rates, 1870–1990

Published online by Cambridge University Press:  03 March 2009

Christopher Hanes
Affiliation:
Federal Reserve Board, 20th and C. Streets NW, Washington, DC 20551

Abstract

A modern household's consumption bundle is more finished than that of a typical worker in the past: the average consumption good passes through more stages of production before purchase. This has affected the cyclical behavior of wages relative to the price of the consumption bundle because wages are more procyclical relative to prices of more-finished goods. Nowadays real consumption wages are procyclical. They were less procyclical before the Second World War, and they may have been acyclical or even countercyclical before the First World War.

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Articles
Copyright
Copyright © The Economic History Association 1996

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