{
  "title": "Real Wage Adjustment in the Former Soviet Union",
  "publication": "IMF Policy Discussion Papers, September 1, 1993",
  "sourceUrl": "https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/real-wage-adjustment-in-the-former-soviet-union-1443",
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  "summary": "Since 1991, the economies of the former Soviet Union have experienced sizeable shocks that have pushed equilibrium real wages far from pre-transition levels.",
  "sections": [
    {
      "heading": "Executive summary and context",
      "content": "- Since 1991, the economies of the former Soviet Union have experienced sizeable shocks that have pushed equilibrium real wages far from pre-transition levels.\n- The paper sets out a framework to assess the degree of real wage adjustment needed to restore equilibrium and discusses practical problems in applying wage targets and monitoring real wage developments.\n- A key policy conclusion: because the accuracy of real wage targets is inevitably suspect, observable indicators should be identified to evaluate the adequacy of actual movements in real wages and of the wage targets; rigid indexation rules should be avoided in nominal incomes policies.\n- The views expressed are those of the author(s) and do not necessarily represent those of the Fund.\n- This is a Paper on Policy Analysis and Assessment and the author(s) would welcome any comments on the present text. Citations should refer to a Paper on Policy Analysis and Assessment of the International Monetary Fund, mentioning the author(s) and the date of issuance."
    },
    {
      "heading": "Framework and measurement issues",
      "content": "- Provides a framework to assess the required degree of real wage adjustment to restore equilibrium wages after transition shocks.\n- Discusses practical problems in:\n  - applying wage targets, and\n  - monitoring real wage developments.\n- Emphasizes the limited accuracy of real wage targets and the need for observable indicators to evaluate both actual real wage movements and the targets themselves.\n- Recommends avoiding rigid indexation rules in nominal incomes policies due to measurement uncertainty."
    },
    {
      "heading": "Key findings and policy implications",
      "content": "- Findings:\n  - Equilibrium real wages have been pushed far from pre-transition levels as a result of sizeable shocks since 1991.\n  - Real wage targets are inevitably of uncertain accuracy; therefore, reliance on them alone is problematic.\n- Policy recommendations:\n  - Identify and use observable indicators to evaluate the adequacy of real wage movements and targets.\n  - Avoid rigid indexation rules in nominal incomes policies.\n  - Use the proposed framework to guide assessment of wage adjustment needs while acknowledging measurement limitations."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Income, Inflation, Labor, National accounts, Prices, Real wages, Wage adjustments, Wages\n- Keywords: Baltics, full employment, Income, income loss, Inflation, input price shock, PDP, price, price liberalization, real product wage, Real wages, terms of trade estimate, terms-of-trade deterioration, Wage adjustments, wage-price dynamics, Wages\n\n---\n\n\nSource: https://www.imf.org/en/publications/imf-policy-discussion-papers/issues/2016/12/30/real-wage-adjustment-in-the-former-soviet-union-1443"
    }
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    "Authors: Louis Dicks-Mireaux",
    "Published: September 1, 1993",
    "Series: IMF Policy Discussion Papers",
    "DOI: https://doi.org/10.5089/9781451969603.003",
    "Since 1991, the economies of the former Soviet Union have experienced sizeable shocks that have pushed equilibrium real wages far from pre-transition levels.",
    "The paper sets out a framework to assess the degree of real wage adjustment needed to restore equilibrium and discusses practical problems in applying wage targets and monitoring real wage developments.",
    "A key policy conclusion: because the accuracy of real wage targets is inevitably suspect, observable indicators should be identified to evaluate the adequacy of actual movements in real wages and of the wage targets; rigid indexation rules should be avoided in nominal incomes policies.",
    "The views expressed are those of the author(s) and do not necessarily represent those of the Fund.",
    "This is a Paper on Policy Analysis and Assessment and the author(s) would welcome any comments on the present text. Citations should refer to a Paper on Policy Analysis and Assessment of the International Monetary Fund, mentioning the author(s) and the date of issuance.",
    "Provides a framework to assess the required degree of real wage adjustment to restore equilibrium wages after transition shocks.",
    "Discusses practical problems in:",
    "Emphasizes the limited accuracy of real wage targets and the need for observable indicators to evaluate both actual real wage movements and the targets themselves.",
    "Recommends avoiding rigid indexation rules in nominal incomes policies due to measurement uncertainty.",
    "Findings:",
    "Policy recommendations:",
    "Subject: Income, Inflation, Labor, National accounts, Prices, Real wages, Wage adjustments, Wages",
    "Keywords: Baltics, full employment, Income, income loss, Inflation, input price shock, PDP, price, price liberalization, real product wage, Real wages, terms of trade estimate, terms-of-trade deterioration, Wage adjustments, wage-price dynamics, Wages"
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