The low indexation of nominal wages to prices in the euro zone and the United States currently plays a very important role there

Nominal wage formation in the United States and the euro zone currently has the particular feature that the indexation of nominal wages to prices is low. This feature is now very important since it implies that a rise in the oil price reduces real wages, but has a very small impact on profits . As a result of the low indexation of wages to price s , any rise in the oil price has a negative impact on households , but not on companies.