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Real Wages over the Business Cycle: A Band Spectrum Approach

This paper uses band spectrum regression to isolate the cyclical relationship between real wages and employment in U.S. postwar monthly data. The author finds a small, but statistically significant, countercyclical pattern to real wages when real wages are measured relative to producer prices, but no cyclical pattern when real wages are measured relative to consumer prices. The spectral decomposition shows that the "cyclical" relationships reported in many time domain studies are attributable to correlations at frequencies either too high (periods less than two years) or too low (periods greater than ten years) to be associated

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	Cushing, Matthew J Professor of Economics Expertise: Labor Economics Econometrics Macroeconomics Economics CBA 352 P.O. Box 880489 University of Nebraska-Lincoln Lincoln, NE 68588-0489, USA Phone: (402) 472-2323 Fax: (402) 472-9700 mcushing1@unl.edu	Cushing, Matthew J	Economics