Table of Contents
Economics Research International
Volume 2010, Article ID 250729, 5 pages
http://dx.doi.org/10.1155/2010/250729
Research Article

The Cyclical Behaviour of Real Wages: Evidence from Australia

School of Economics, Finance, and Marketing, RMIT University, Melbourne 3001, Australia

Received 4 March 2010; Accepted 8 June 2010

Academic Editor: Jos van Ommeren

Copyright © 2010 George B. Tawadros. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper analyses the behaviour of real wages over the business cycle for Australia, using quarterly observations for the period 1984  :  1–2008  :  2. The unobserved cyclical components of prices, real wages, and three other cyclical variables are extracted from the observed time series using Harvey's (1985, 1989) structural time series model. A model relating these components is estimated, producing results which show that both prices and real wages are procyclical.