Wage Rigidity in Germany

Abstract

The interaction between inflation and unemployment has concerned researchers and politicians for a long time. But is there really a compulsory trade-off between inflation and unemployment? The author pursues this and other questions concerning wage rigidity. The first and major part of the book focuses on downward nominal wage rigidity (DNWR). It provides an overview on causes, extent, and implications of DNWR, deals with the macroeconomic consequences of DNWR, and analyzes whether or not DNWR affects workers differently. The second part of the book deals with real wage rigidity of newly hired workers over the business cycle. It provides a brief overview on previous research and recent developments, and it presents empirical evidence on the cyclicality of real entry-wages in Germany.