Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/245987 
Year of Publication: 
2020
Series/Report no.: 
Danmarks Nationalbank Working Papers No. 166
Publisher: 
Danmarks Nationalbank, Copenhagen
Abstract: 
We estimate the pass-through of a cost-push wage shock to producer prices of firms in Denmark. We deal with the endogeneity of wages by using an identification strategy based on variation in the estimated outside option of workers within an industry. Our results suggest that the pass-through elasticity of wage increases to prices amounts to about one third when keeping the marginal product of labor constant. Our results are in line with previous studies of earlier time periods and confirm an important causal relationship between wages and prices.
Subjects: 
Wage pass-through
Phillips curve
Producer prices
JEL: 
D24
E52
L11
Document Type: 
Working Paper

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