Do Rising Labor Costs Trigger Higher Inflation? - FEDERAL RESERVE BANK of NEW YORK

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Current Issues in Economics and Finance

Do Rising Labor Costs Trigger Higher Inflation?

September 1997 Volume 3 Number 11

JEL classification: J3, E3

Author: David A. Brauer

The evidence that developments in compensation growth lead overall CPI inflation has thus far been inconclusive. This study, however, sheds new light on the relationship between labor costs and price inflation. By breaking down compensation and prices into their various components, the author finds that compensation growth in the service-producing segment of the private sector can help predict prices for a specific group of services.

PDF full article PDF

6 pages / 247 kb

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