Relative prices, aggregate prices, and wage indexation

Article Abstract:

Wage indexation is resorted to by management and labor to assure the value of real wages that workers receive. The manner of indexation and the wage pattern agreed upon by both parties are examined through a contract model with three prices. Results indicate that wages are ordinarily pegged to the aggregate price index of goods consumed by workers. However, the degree of risk-aversion of both the firm and workers and the aggregate price index of goods bought by the firm's owners, as distinguished from the price index of workers' consumables, are factors in the wage indexation decision.

Models, Labor market, Wages, Wages and salaries, Indexation (Economics)

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General conditions for subsidy-free prices

Article Abstract:

The incorporation of multilateral rivalry, which comes from firms producing different product mixes, into a model of subsidy-free prices significantly changes the range at which such prices operate. Thus, the conventional assumption of incremental costs as the floor and stand-alone costs as the ceiling does not hold as in the case of rivalry emanating mainly from specialized entities.

Competition (Economics), Pricing

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Inflation, agency costs, and equity returns

Article Abstract:

Issues are presented concerning the influence of relative price variability and agency costs on the rate of inflation. The relationship between real equity returns and inflation is discussed.

Prices, Finance, Inflation (Finance), Agency (Law)

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