The Korean Journal of Economic Studies
Empirical Investigation of Wage-Price Spiral Using Long-time Series Wage Data
ShinHyuck Kang (Korea Labor Institute)Year 2024Vol. 72No. 1
This paper empirically analyzes the potential wage-price spiral concern after the COVID-19 period, using novel long-term wage time-series data including periods of high inflation. Results from the structural vector autoregression model and state-dependent local projection show that the significance of the impact of nominal wage inflation on price inflation varies depending on the inclusion of data from the high inflation period of the 1970s. I also show that the effect of wage inflation on price inflation is state-dependent, with a stronger impact when the level of price inflation is higher.