{"title":"The Normalization of Wage Dynamics","authors":"Takeo Hoshi, Anil K. Kashyap","doi":"10.1111/aepr.12503","DOIUrl":null,"url":null,"abstract":"<p>In an article published in 2021, Hoshi and Kashyap find that the link between wage inflation and labor market conditions in Japan changed starting in the late 1990s. The link between wage inflation and price inflation also disappeared around the same time. Two factors were identified as the main reasons why wages became less sensitive to the tightness of the labor market: firms' labor hoarding of full-time workers and an increasing reliance on newly hired part-time workers. Both of these factors started to disappear by the late 2010s. After re-confirming the main results in the 2021 article by Hoshi and Kashyap, this paper finds that wage inflation has become sensitive to the unemployment rate (an important labor indicator). We also find weak evidence that the link between wage inflation and price inflation might be re-emerging.</p>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"20 2","pages":"237-246"},"PeriodicalIF":7.0000,"publicationDate":"2025-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/aepr.12503","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asian Economic Policy Review","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/aepr.12503","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
In an article published in 2021, Hoshi and Kashyap find that the link between wage inflation and labor market conditions in Japan changed starting in the late 1990s. The link between wage inflation and price inflation also disappeared around the same time. Two factors were identified as the main reasons why wages became less sensitive to the tightness of the labor market: firms' labor hoarding of full-time workers and an increasing reliance on newly hired part-time workers. Both of these factors started to disappear by the late 2010s. After re-confirming the main results in the 2021 article by Hoshi and Kashyap, this paper finds that wage inflation has become sensitive to the unemployment rate (an important labor indicator). We also find weak evidence that the link between wage inflation and price inflation might be re-emerging.
期刊介绍：
The goal of the Asian Economic Policy Review is to become an intellectual voice on the current issues of international economics and economic policy, based on comprehensive and in-depth analyses, with a primary focus on Asia. Emphasis is placed on identifying key issues at the time - spanning international trade, international finance, the environment, energy, the integration of regional economies and other issues - in order to furnish ideas and proposals to contribute positively to the policy debate in the region.
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