Inflation and wage indexation with multiperiod contracts

Avia Spivak, J. Weinblatt, B. Z. Zilberfarb

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

This paper deals with the impact of wage indexation on the rate of inflation in two alternative institutional settings: simultaneous and overlapping multiperiod contracts. The results show that in the case of simultaneous contracts, the degree of indexation determines the timing of price changes but not its intercontract magnitude. When contracts are overlapping and uniformly distributed over time, indexation always increases the absolute rate of inflation and its variability.

Original languageEnglish
Pages (from-to)1299-1312
Number of pages14
JournalEuropean Economic Review
Volume31
Issue number6
DOIs
StatePublished - 1 Jan 1987

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