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Money Wages, Consumer Prices, and Causality in Australia

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  • E. A. BOEHM

Abstract

This paper exploits recently developed statistical techniques to examine the causal patterns in lag relationships between changes in wages and consumer prices. The analysis uses quarterly data for selected periods and a total historical sample period 1954‐82. Causation has generally been unidirectional from wages to prices. However, for the first half of the 1970s bidirectional causation was detected, though the causation from wages to prices was statistically more significant. Brief consideration is given to some policy implications of the results.

Suggested Citation

  • E. A. Boehm, 1984. "Money Wages, Consumer Prices, and Causality in Australia," The Economic Record, The Economic Society of Australia, vol. 60(3), pages 236-251, September.
    • Handle: RePEc:bla:ecorec:v:60:y:1984:i:3:p:236-251
    DOI: 10.1111/j.1475-4932.1984.tb00859.x
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    References listed on IDEAS

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    Cited by:

    1. Akhand Akhtar Hossain, 2019. "Does money have a role in the inflation process? Evidence from Australia," Australian Economic Papers, Wiley Blackwell, vol. 58(2), pages 113-129, June.
    2. Paul Miller & Charles Mulvey, 1993. "What Do Australian Unions Do?," The Economic Record, The Economic Society of Australia, vol. 69(3), pages 315-342, September.
    3. Akhand Akhtar Hossain, 2015. "The Evolution of Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 14611.
    4. Jerome Fahrer & Justin Myatt, 1991. "Inflation in Australia: Causes, Inertia and Policy," RBA Research Discussion Papers rdp9105, Reserve Bank of Australia.
    5. Ernst A. Boehm & Vance L. Martin, 1989. "An Investigation into the Major Causes 01 Australia's Recent Inflation and Some Policy Implications," The Economic Record, The Economic Society of Australia, vol. 65(1), pages 1-15, March.
    6. Akhand Akhtar Hossain, 2019. "How justified is abandoning money in the conduct of monetary policy in Australia on the grounds of instability in the money‐demand function?," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 48(2), July.

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