The extent of wage indexation in Indian industries
TL;DR: In this paper, the authors measure the extent of wage indexation in Indian industries and derive the value of the indexation coefficient from a reduced-form equation, which is a structural parameter.
About: This article is published in Journal of Macroeconomics.The article was published on 1989-06-01. It has received 4 citations till now. The article focuses on the topics: Wage.
Citations
More filters
TL;DR: In this paper, a structuralist macroeconomic model is proposed to explain the movement of wages in the manufacturing sector in India for the period 1960-86, where the changing strength, structure and activities of unions are considered explicitly.
Abstract: The purpose of this article is to explain the movement of wages in the manufacturing sector in India for the period 1960–86. A ‘structuralist’ macroeconomic model is advanced where the changing strength, structure and activities of unions are considered explicitly. The objective is to disentangle the effects of factors specific to the bargaining process from the effects of overall economic development. We consider two available wage series and we make a priori assumptions regarding the nature of both the labour and product markets associated with these series. Our econometric results support our characterisations and we show that the effects of both union related variables and overall macroeconomic variables differ across the two wage series.
13 citations
TL;DR: In this paper , the authors presented a framework to forecast futures prices of stocks listed on the National Stock Exchange (NSE) in India during normal and new normal times (affected by COVID-19 and a macroeconomic slowdown).
9 citations
01 Jan 1994
TL;DR: In this article, a simultaneous-equation model was proposed to study the feedback effects between sirlkes and nominal wages in Indian industry during the period 1960*86, and the results indicated that strikes affected wages whereas strike activity was not affected by wages.
Abstract: This paper posits and tests a simultaneous-equation model to study the feedback effects between sirlkes and nominal wages in Indian industry during the period 1960*86. The model presented here considers the basic elements of wage determination under collective bargaining, but also incorporates the role of inflationary expectations through wage indexation specifications, as well as Includes a structural shift (or regime shift) variable. The assertion here is that actual nominal wages depend both on labour market conditions as well as on the ability of unions to enforce wage contracts. The results indicate that during the period 1960-86 In Indian Industry, strikes affected wages whereas strike activity was not affected by wages. The results also point to the depressing effect of the regime shift variable both on wages and on strike activity.
2 citations
References
More filters
TL;DR: This paper examined the role of wage indexation in dampening macroeconomic fluctuations in a simple neoclassical model modified to incorporate short-term wage rigidities and uncertainty and found that while indexing insulates the real sector from the effects of monetary shocks, it may exacerbate the real effects of real shocks.
734 citations
TL;DR: In this paper, the authors examined the inter-action between growth and income distribution in an underdeveloped economy with the help of a simple macroeconomic model and showed that a bad income distribution could explain stagnation in the sense of reduced growth.
Abstract: The deceleration in the rate of industrial growth in the Indian economy since the middlesixties, initially interpreted by some as a temporary downward deviation from trend, hasnow come to be generally accepted as reflecting long-run tendencies towards stagnation.Several explanations for these tendencies have been offered. Bhagwati and Desai (1970)and Bhagwati and Srinivasan (1975) have focused on inefficiencies and the misallocationof resources arising from industrial policies pursued by the government. Others,Chakravarty (1974), Raj (1976) and Vaidyanathan (1974) among them, have emphasisedthe sluggishness of agricultural growth which is alleged to have retarded industrial growthby limiting markets and the supply of wage goods and raw materials. A third view, reflectedin Srinivasan and Narayana (1977) for example, has put the blame on a slackening of invest-ment demand due to lower public investment, but does not explain why public investmentfell, or why its fall restrained industrial growth. Finally, there is the explanation, put forthin Bagchi (1970, 1975, 1982), in Nayyar (1978) and in parts of Mitra (1977), that inequali-ties in income distribution have resulted in a limited demand for industrial goods, reducedincentives for investment, and therefore reduced growth. This view seems to suggest apositive relation between growth and income equality which is opposed to the generallyaccepted idea, derived from Cambridge growth models, that higher growth requires greaterinequality.The purpose of this paper is to examine the last explanation by considering the inter-action between growth and income distribution in an underdeveloped economy with thehelp of a simple macroeconomic model. The model is a stylisation of the Indian economy,so that we will be able to use the model to assess the argument that a deceleration in therate of growth of the Indian industrial economy could have been caused by an unequaldistribution of income. The argument will not be made that this income distributional con-straint is the binding constraint on industrial growth: the model will merely examine theinternal consistency of the argument that a bad income distribution could explain stagnation(in the sense of reduced growth), and show that in the Indian context, as in other similarcontexts, this argument can be put forward in explaining 'stagnation'.Our argument is first presented with a highly simplified schematisation of the Indianeconomy, which we shall call the basic model. The economy modelled produces only one
523 citations
2 citations