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Franz, Wolfgang
Smolny, Werner
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Series/Report no.: 
Discussion Paper, Center for International Labor Economics (CILE), University of Konstanz 5
In this paper a variety of theories concerning the wage and price formation in Germany are tested. More specifically, wage and price equations are specified in a fairly general manner which nests several theoretical arguments (such as the target real wage bargaining model, hysteresis effects, outsider ineffectiveness, interindustry wage competition) and a perceived tradeoff between reductions in working time and wage increases. Related arguments hold for the price setting process. Recently developed econometric techniques such as error correction models are applied.
Document Type: 
Working Paper

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