Abstract
This paper applies the real wage gap framework in Bruno and Sachs’ (1985) seminal work “The Economics of Worldwide Stagflation” to New Zealand. An extensive sensitivity analysis finds that using different definitions of the actual real wage can change the measured real wage gap by over 30%, but that the warranted real wage is relatively insensitive to other changes in data and methodology. The data and models used do not provide any evidence to suggest that the real wage gap plays a significant role in explaining the path of employment or unemployment in New Zealand between 1967 and 1991. Two general conclusions are possible. Either the real wage gap is not a determinant of employment or unemployment in New Zealand, or it is a determinant, but this effect cannot be isolated to measurement error in either the warranted or the actual real wage.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
