{
  "title": "Wage Indexation and the Cost of Disinflation",
  "publication": "IMF Working Papers, May 1, 1996",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/wage-indexation-and-the-cost-of-disinflation-1894",
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  "summary": "While a standard academic presumption has been that wage indexation reduces the cost of disinflation, policymakers generally contend that wage indexing makes disinflation more difficult.",
  "sections": [
    {
      "heading": "Summary and central finding",
      "content": "- While a standard academic presumption has been that wage indexation reduces the cost of disinflation, policymakers generally contend that wage indexing makes disinflation more difficult.\n- The paper reexamines the effects of wage indexing on the output loss caused by money-based stabilization.\n- Principal finding: the cost of disinflation with indexed wage contracts tends to be smaller than that with contracts that specify preset time-varying wages, but larger than that with contracts that specify fixed wages.\n- Concluding interpretation: the academic and policymakers views can be both appropriate depending on the standard of reference."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Disinflation, Inflation, Labor, Prices, Wage adjustments, Wage indexation, Wages\n- Keywords: cost of disinflation, cost of living, Disinflation, disinflation policy, Eastern Europe, indexation rule, indexed contract, indexed economy, Inflation, inflation rate, Wage adjustments, wage contract, Wage indexation, Wages, WP\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/wage-indexation-and-the-cost-of-disinflation-1894"
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    "[Markdown version](/en/publications/wp/issues/2016/12/30/wage-indexation-and-the-cost-of-disinflation-1894/index.md)",
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    "Authors: Esteban Jadresic",
    "Published: May 1, 1996",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451846690.001",
    "While a standard academic presumption has been that wage indexation reduces the cost of disinflation, policymakers generally contend that wage indexing makes disinflation more difficult.",
    "The paper reexamines the effects of wage indexing on the output loss caused by money-based stabilization.",
    "Principal finding: the cost of disinflation with indexed wage contracts tends to be smaller than that with contracts that specify preset time-varying wages, but larger than that with contracts that specify fixed wages.",
    "Concluding interpretation: the academic and policymakers views can be both appropriate depending on the standard of reference.",
    "Subject: Disinflation, Inflation, Labor, Prices, Wage adjustments, Wage indexation, Wages",
    "Keywords: cost of disinflation, cost of living, Disinflation, disinflation policy, Eastern Europe, indexation rule, indexed contract, indexed economy, Inflation, inflation rate, Wage adjustments, wage contract, Wage indexation, Wages, WP"
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