The Interaction of Labor Markets and Inflation: Micro Evidence from the International Wage Flexibility Project

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 03.04.2006, 12:15 - 13:30


Presentation by 

Erica L. Groshen (Cornell University)


This paper reports the results of the International Wage Flexibility Project (IWFP). The adoption of explicit or implicit inflation targets by many central banks, and the low stable rates of inflation that have ensued, raise the question of how inflation affects market efficiency. The goal of the IWFP - a consortium of over forty researchers with access to micro level earnings data for 16 countries is to provide microeconomic evidence on the costs and benefits of inflation in the labor market. The results are intended to inform researchers as well as monetary and regulatory policymakers who are interested in labor markets or the impact of inflation.

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