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2016•Unpublished venueRequires access

THE WAGE-PRICE-PRODUCTIVITY RELATIONSHIP IN A SMALL DEVELOPING COUNTRY: THE CASE OF BARBADOS

Andrew S. Downes, Carlos Holder, Hyginus Leon

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Abstract

This paper applies cointegration theory to the wage-price productivity relationship in Barbados. The results indicate that the rate of inflation increases with factor costs, and that productivity impacts positively on real wages but offsets price inflation. A domestic demand influence, real wages and a technology variable explain productivity. The main policy implications are that increasing labour productivity can improve competitiveness, the effects of import ed inflation should be accommodated, and wage policies should reflect the relationship between productivity, real wages and inflation.

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What this paper is about

This paper applies cointegration theory to the wage-price productivity relationship in Barbados. The results indicate that the rate of inflation increases with factor costs, and that productivity impacts positively on real wages but offsets price inflation. A domestic demand influence, real wages and a technology variable explain productivity. The main policy implications are that increasing labour productivity can improve competitiveness, the effects of import ed inflation should be accommodated, and wage policies should reflect the relationship between productivity, real wages and inflation.

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OpenAlex reports 5 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

This paper applies cointegration theory to the wage-price productivity relationship in Barbados. The results indicate that the rate of inflation increases with factor costs, and that productivity impacts positively on real wages but offsets price inflation. A domestic demand influence, real wages and a technology variable explain productivity. The main policy implications are that increasing labour productivity can improve competitiveness, the effects of import ed inflation should be accommodated, and wage policies should reflect the relationship between productivity, real wages and inflation.

Key concepts: Economics, Productivity, Inflation (cosmology), Cointegration, Real wages, Wage, Labour economics, Efficiency wage

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