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Does wage inflation cause price inflation?

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  • Gregory D. Hess
  • Mark E. Schweitzer

Abstract

Is there any evidence to support the assumption that increased wages cause inflation? This study updates and expands earlier research into this question and finds little support for the view that higher wages cause higher prices. On the contrary, more evidence is found for higher prices leading to wage growth.

Suggested Citation

  • Gregory D. Hess & Mark E. Schweitzer, 2000. "Does wage inflation cause price inflation?," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Apr.
    • Handle: RePEc:fip:fedcpd:y:2000:i:apr:n:1
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Elena Bobeica & Matteo Ciccarelli & Isabel Vansteenkiste, 2019. "The link between labor cost and price inflation in the euro area," Working Papers Central Bank of Chile 848, Central Bank of Chile.
    2. Michael T. Kiley, 2023. "The Role of Wages in Trend Inflation: Back to the 1980s?," Finance and Economics Discussion Series 2023-022, Board of Governors of the Federal Reserve System (U.S.).
    3. Elke Hahn, 2021. "How are wage developments passed through to prices in the euro area? Evidence from a BVAR model," Applied Economics, Taylor & Francis Journals, vol. 53(22), pages 2467-2485, May.
    4. Hahn, Elke, 2020. "The wage-price pass-through in the euro area: does the growth regime matter?," Working Paper Series 2485, European Central Bank.
    5. Bobeica, Elena & Ciccarelli, Matteo & Vansteenkiste, Isabel, 2021. "The changing link between labor cost and price inflation in the United States," Working Paper Series 2583, European Central Bank.
    6. Nicola Viegi & Vincent Dadam, 2020. "Estimating a New Keynesian Wage Phillips Curve," Working Papers 11000, South African Reserve Bank.
    7. Tiwari, Aviral Kumar & Mutascu, Mihai & Andries, Alin Marius, 2013. "Decomposing time-frequency relationship between producer price and consumer price indices in Romania through wavelet analysis," Economic Modelling, Elsevier, vol. 31(C), pages 151-159.
    8. Attilio Zanetti, 2007. "Do Wages Lead Inflation? Swiss Evidence," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 143(I), pages 67-92, March.
    9. Vasile-Aurel Caus & Daniel Badulescu & Mircea Cristian Gherman, 2017. "Using Wavelets In Economics. An Application On The Analysis Of Wage-Price Relation," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 2(1), pages 32-42, March.

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