Wage Indexation, the Scandinavian Model and Macroeconomic Stability
1979 (English)Report (Other academic)
The article analyzes wage indexation in an open economy as a means of promoting macroeconomic stability in the case of domestic demand and foreign price shocks. Employment can be stabilized by linking wages to an index of both traded and non-traded goods. But this index is not likely to coincide with the producer or the consumer price index. A "Scandinavian" wage indexation-linking wages to the price of traded goods only as in the Scandinavian model of wage formation - minimizes the effects in the trade balance but does this at the cost of variations in total employment.
Place, publisher, year, edition, pages
Stockholm: IIES , 1979. , 34 p.
Seminar Paper / Institute for International Economic Studies, Stockholm University, ISSN 0347-8769 ; 127
IdentifiersURN: urn:nbn:se:su:diva-41411OAI: oai:DiVA.org:su-41411DiVA: diva2:330043