Nuremberg Research Seminar in Economics on 31 January 2024 – LG 0.423

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You are invited to join the weekly Nuremberg Research Seminar in Economics on 31 January 2024, from 13.15 to 14.45 pm. The seminar will be held in room LG 0.423. Sebastian Link (ifo Institute Munich) will be talking about „Inflation and Wage Expectations of Firms and Employees”.

More information can be found here:

We study the link between inflation and wage expectations on both sides of the negotiating table using new and extensive panel data of German firms and employees. In the data, one percentage point higher inflation expectations are associated with at most 0.2 percentage points higher own wage growth for firms, and less than 0.1 higher expected wage growth for employees. Our surveys allow to investigate several mechanisms for why the average pass-through may be so low. In line with theory on wage rigidities, the intensive margin of pass-through—i.e., pass-through conditional on negotiations taking place—is considerably higher than average pass-through. In addition, expected pass-through is higher when employees have more bargaining power.