No. 18/2002
A WAGE CURVE FOR THE INTERWAR LABOUR MARKET:
EVIDENCE FROM A PANEL OF NORWEGIAN MANUFACTURING
INDUSTRIES
Gunnar Bårdsen
Jurgen Doornik
Jan Tore Klovland
Abstract:
We present an econometric analysis of wage behaviour in Norway during
the interwar years. Applying GMM estimation methods to a newly constructed
panel of manufacturing industry data, we Þnd that the interwar years
do not seem to be such an anomalous time period as has been suggested
with respect to wage behaviour. We estimate a long-run wage curve that
has all the modern features of being homogeneous in prices, proportional
to productivity, and having an unemployment elasticity of -0.1. We also
present some new Monte Carlo evidence on the properties of the estimators
used.
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