Report
Patrick Artus

The key role of the “new model of wage formation” in OECD countries

In the recent period, wage formation in OECD countries has been characterised by: The low indexation of nominal wages to prices; The muted effect of the unemployment rate on wage growth. This has given rise to new features for the economic cycle in the OECD: There is no longer any wage inflation at end of the expansion period, which is conducive to interest rates remaining low; Accordingly, inflation is solely exogenous; Exogenous inflation has a very significant effect on demand for goods and services (real wages fall as inflation rises due to the lack of reaction of nominal wages to inflation).
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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