On the frequency of wage indexation

Leif Danziger

doi:10.1016/0014-2921(83)90046-6

On the frequency of wage indexation

Leif Danziger

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2 Scopus citations

Abstract

This paper analyzes the optimal frequency of wage indexation. It demonstrates that a change in the expected value of money does not affect the optimal frequency, but that an increase in the riskiness of the value of money leads to an increase in the optimal frequency. An increase in the worker's risk aversion also leads to an increase in the optimal frequency, while an increase in the cost of indexation leads to a decrease in the optimal frequency.

Original language	English
Pages (from-to)	297-304
Number of pages	8
Journal	European Economic Review
Volume	22
Issue number	3
DOIs	https://doi.org/10.1016/0014-2921(83)90046-6
State	Published - 1 Jan 1983
Externally published	Yes

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/0014-2921(83)90046-6

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AB - This paper analyzes the optimal frequency of wage indexation. It demonstrates that a change in the expected value of money does not affect the optimal frequency, but that an increase in the riskiness of the value of money leads to an increase in the optimal frequency. An increase in the worker's risk aversion also leads to an increase in the optimal frequency, while an increase in the cost of indexation leads to a decrease in the optimal frequency.

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DO - 10.1016/0014-2921(83)90046-6

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On the frequency of wage indexation

Abstract

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