Lohn- und Preissysteme für Österreich

Summary

This paper deals with the simultaneous estimation of wage—price systems for the Austrian economy using yearly data from 1955 to 1975. The dependent variables are the growth rates of the consumer price index, the GNP—deflator and the average wage income per employee. The explanatory variables for the price equations are mainly cost variables (wages and import prices) and only to a minor extent demand variables (capacity utilization). The wage equation is specified alternatively as a short run Phillips—curve and in a way in which the distribution between wages and profits remains constant.

The empirical results can be summarized as follows:

• 1) Price changes are mainly cost determined.

• 2) The impact of a one per cent increases in excess demand for goods and in the labor markets raises wages three to four times stronger than prices.

• 3) Wage behavior in Austria should be looked at as being determined by short and long run considerations. In the short run there exists a significant Phillips relationship and the coefficient of price changes in the wage equation is much below one. In the long run wages grow according to the price and producitvity trends so that the income distribution does not change.

• 4) The simultaneous equation bias does not appear to be too serious, as a comparison with ordinary least square estimation shows, but individual coefficients of the wage—price system are affected to an extent where the more complicated simultaneous estimation methods become worthwhile.