Granger-causality, real factor prices and employment: a re-appraisal with U.K. data

A. Drobny; Robert Gausden

doi:10.1016/0014-2921(88)90234-6

Granger-causality, real factor prices and employment: a re-appraisal with U.K. data

A. Drobny, Robert Gausden

Research output: Contribution to journal › Article › peer-review

Abstract

This paper reports the results produced by applying tests for Granger-causality of post-war U.K. real wage and employment data. The results suggest that real wages Granger-cause employment with no feedback. This result is robust to the inclusion of real materials prices. The results are not robust to changes in the sample period: real wages and employment appear independent with data up to 1977(4). The oscillations of real wages between 1976 and 1978, when a stern wage policy was implemented and dismantled, are responsible for these different results. This explains the contradictory results reported in previous studies.

Original language	English
Pages (from-to)	1261-1283
Number of pages	23
Journal	European Economic Review
Volume	32
Issue number	6
DOIs	https://doi.org/10.1016/0014-2921(88)90234-6
Publication status	Published - 1988

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title = "Granger-causality, real factor prices and employment: a re-appraisal with U.K. data",

abstract = "This paper reports the results produced by applying tests for Granger-causality of post-war U.K. real wage and employment data. The results suggest that real wages Granger-cause employment with no feedback. This result is robust to the inclusion of real materials prices. The results are not robust to changes in the sample period: real wages and employment appear independent with data up to 1977(4). The oscillations of real wages between 1976 and 1978, when a stern wage policy was implemented and dismantled, are responsible for these different results. This explains the contradictory results reported in previous studies.",

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AU - Drobny, A.

AU - Gausden, Robert

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N2 - This paper reports the results produced by applying tests for Granger-causality of post-war U.K. real wage and employment data. The results suggest that real wages Granger-cause employment with no feedback. This result is robust to the inclusion of real materials prices. The results are not robust to changes in the sample period: real wages and employment appear independent with data up to 1977(4). The oscillations of real wages between 1976 and 1978, when a stern wage policy was implemented and dismantled, are responsible for these different results. This explains the contradictory results reported in previous studies.

AB - This paper reports the results produced by applying tests for Granger-causality of post-war U.K. real wage and employment data. The results suggest that real wages Granger-cause employment with no feedback. This result is robust to the inclusion of real materials prices. The results are not robust to changes in the sample period: real wages and employment appear independent with data up to 1977(4). The oscillations of real wages between 1976 and 1978, when a stern wage policy was implemented and dismantled, are responsible for these different results. This explains the contradictory results reported in previous studies.

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DO - 10.1016/0014-2921(88)90234-6

M3 - Article

VL - 32

SP - 1261

EP - 1283

JO - European Economic Review

JF - European Economic Review

IS - 6

ER -

Granger-causality, real factor prices and employment: a re-appraisal with U.K. data

Abstract

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