Why Has Australian Wages Growth Been So Low? A Phillips Curve Perspective.

• Autores: Chew Lian Chua, TIM ROBINSON
• Localización: Economic record, ISSN 0013-0249, Vol. 94, Nº. 0, 2018, págs. 11-32
• Idioma: inglés
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• Resumen

  • Wages growth in Australia has recently been the lowest in two decades. One possible explanation is a decline in the non‐accelerating inflation rate of unemployment (NAIRU). We examine this hypothesis by estimating a wage Phillips curve including a time‐varying NAIRU. Our findings are: (i) the NAIRU has recently been around 5.5 per cent; (ii) our approach increases the precision of the NAIRU estimates; (iii) low inflation expectations have been an important contributing factor; and (iv) the long‐run annual wages growth is nearly 3 per cent. We also find that the underutilisation rate suggests greater slack exists, but is less useful in explaining wage developments. [ABSTRACT FROM AUTHOR]