@article{Determination::4252,
      recid = {4252},
      author = {Merrett, Daryl},
      title = {The Process of Wage Determination: A Survey of Some Recent  Work},
      publisher = {Bank of Canada},
      address = {1979},
      pages = {1 online resource (iv, 60 pages)},
      abstract = {In this report, the author surveys some of the important  issues in the process of wage determination, and discusses  the work in these areas that has been done in recent years  at the Bank of Canada. The discussion is developed from the  perspective that there are two alternative approaches to  wage determination, distinguished primarily by whether it  is the wage level or the rate of wage increase that is  affected by conditions of excess supply in the labour  market. Single equation estimates of both types of  specification are examined. It can be demonstrated,  however, that the distinction between the two approaches  becomes less clear when the interaction of the wage  equation with prices is made endogenous. In other words,  the dynamics of a wage equation cannot be analyzed  independently of price determination and price  expectations. These dynamics are examined briefly with  reference to simulation results from a simple two-equation  wage-price model. Finally, indicators of the degree of  slack in the labour market are considered, with particular  emphasis given to the measured rate of unemployment. It is  known however, that this measured rate is no longer  reliable as an indicator of labour-market tightness, since  the rate of unemployment that corresponds to full  employment has been changing over time. This rate, commonly  referred to as the "natural rate" of unemployment, has been  estimated using two different methods. Both suggest that in  Canada the natural rate is currently about seven percent.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/4252},
      doi = {https://doi.org/10.34989/tr-19},
}