EconStor >
Federal Reserve Bank of New York >
Staff Reports, Federal Reserve Bank of New York >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/60864
  
Title:Early contract renegotiation: An analysis of US labor contracts form 1970 to 1995 PDF Logo
Authors:Rich, Robert
Tracy, Joseph
Issue Date:2011
Series/Report no.:Staff Report, Federal Reserve Bank of New York 521
Abstract:This paper examines the ex post flexibility of U.S. labor contracts during the 1970-95 period by investigating whether unanticipated changes in inflation increase the likelihood of a contract being renegotiated prior to its expiration. We find strong empirical support for this hypothesis. Specifically, our results indicate that renegotiations are triggered principally by large and infrequent price shocks of either sign. When combined with evidence that ex ante contract durations are shorter during episodes of increased inflation uncertainty, our results suggest that these contracts are flexible both ex ante and ex post to changes in the evolution of inflation.
Subjects:labor contract
early renegotiation
JEL:E24
J41
J51
Document Type:Working Paper
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

Files in This Item:
File Description SizeFormat
671423886.pdf176 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/60864

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.