ECB on downward wage rigidity
A study published by the European Central Bank (ECB) on 31 July, has found that the number of industries affected by downward nominal wage rigidity in OECD countries increased between the 1970s and 1990s.
The authors, Steinar Holden and Fredrik Wulfsberg, point out that if wages are rigid downwards in nominal terms inflation will alleviate wage pressure, thus involving a permanent reduction in unemployment.
The question that they address in the paper is how much downward nominal wage rigidity at
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