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US real wages and imports

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The time-series properties of imports and US real wages are examined and the interlinks between them for the period 1970 - 1994, during which import competition was claimed to be part of the reason for US real wage staggering. Aggregate measures of real wages are used along with various measures of imports. No long-run comovement is found for real wages and imports. Real wages and imports were mainly explained by the shocks to themselves. Historical decomposition of the series shows that, for the 1980s and early 1990s, real wages seemed to be mainly affected by aggregate US economic activities. During some periods, imports tended to increase real wages but the impact seems to be mixed. The findings do not support the claim that imports caused US real wage decline.

Document Type: Research Article


Publication date: November 1, 1996

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