Crap

“If everyone worked on one year annual contracts like mine, there would be no wage stickiness in the economy.” — Scott Sumner

Crap, there goes the sticky wages example I use in class.

1 thought on “Crap”

  1. Fischer used one-period contracts as his baseline, so if one period is a year, you’re safe.

    Somewhat off topic, but I find theories that use sticky wages to drive the business cycle problematic. Usually they imply that higher inflation implies lower real wages which means higher output. Thus countercyclical real wages. However, the data on real wages in US postwar biz cycles is that they are acyclical or procyclical, so I find these a serious problem. See http://papers.ssrn.com/sol3/papers.cfm?abstract_id=227241

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