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Open AccessArticle

Cointegration and Structure in Norwegian Wage–Price Dynamics

1
Statistics Norway, Research Department, Postboks 2633 St.Hanshaugen, NO-0131 Oslo, Norway
2
Department of Economics, University of Oslo, Postboks 1095 Blindern, NO-0317 Oslo, Norway
*
Author to whom correspondence should be addressed.
We would like to thank Ådne Cappelen, Jennifer L. Castle, David F. Hendry, Erling Holmøy, Håvard Hungnes and Anders Rygh Swensen for comments and discussions, as well as seminar participants at conferences and workshops at the University of Copenhagen, the Halle Institute for Economic Research, Norges Bank, and Statistics Norway. We wish to express thanks to the guest-editors Rocco Mosconi and Paolo Parulo, and to the two anonymous referees for comments both critical and constructive. The numerical results in the paper were obtained using PcGive 15.0 and Ox 8, provided by Oxmetrics, Oxford, UK.
Econometrics 2020, 8(3), 29; https://doi.org/10.3390/econometrics8030029
Received: 24 March 2018 / Revised: 23 June 2020 / Accepted: 8 July 2020 / Published: 27 July 2020
(This article belongs to the Special Issue Celebrated Econometricians: Katarina Juselius and Søren Johansen)
Wage coordination plays an important role in macroeconomic stabilization. Pattern wage bargaining systems have been common in Europe, but in different forms, and with different degrees of success in terms of actual coordination reached. We focus on wage formation in Norway, a small open economy, where it is custom to regard the manufacturing industry as the wage leader. We estimate a model of wage formation in manufacturing and in two other sectors. Deciding cointegration rank is an important step in the analysis, economically as well statistically. In combination with simultaneous equation modelling, the cointegration analysis provides evidence that collective wage negotiations in manufacturing have defined wage norms for the rest of the economy over the period 1980(1)–2014(4). View Full-Text
Keywords: cointegration; error-correcting adjustment; estimation and hypothesis testing in cointegrated models; rent-sharing in wage formation; pattern wage bargaining; inflation targeting; small open economy wage policies; inflation targeting; macroeconomic fluctuations and transmission mechanisms cointegration; error-correcting adjustment; estimation and hypothesis testing in cointegrated models; rent-sharing in wage formation; pattern wage bargaining; inflation targeting; small open economy wage policies; inflation targeting; macroeconomic fluctuations and transmission mechanisms
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MDPI and ACS Style

Gjelsvik, M.; Nymoen, R.; Sparrman, V. Cointegration and Structure in Norwegian Wage–Price Dynamics. Econometrics 2020, 8, 29. https://doi.org/10.3390/econometrics8030029

AMA Style

Gjelsvik M, Nymoen R, Sparrman V. Cointegration and Structure in Norwegian Wage–Price Dynamics. Econometrics. 2020; 8(3):29. https://doi.org/10.3390/econometrics8030029

Chicago/Turabian Style

Gjelsvik, Marit; Nymoen, Ragnar; Sparrman, Victoria. 2020. "Cointegration and Structure in Norwegian Wage–Price Dynamics" Econometrics 8, no. 3: 29. https://doi.org/10.3390/econometrics8030029

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