TITLE:
Macroeconomic Determinants of Real Wages in an Internationally Integrated Economy, Mexico 1998.1-2011.4
AUTHORS:
Juan Carlos Márquez Ortiz, Selene Jiménez Bautista
KEYWORDS:
Rational Expectations, Real Wage, Productivity, Generalized Method of Moments
JOURNAL NAME:
Modern Economy,
Vol.10 No.6,
June
28,
2019
ABSTRACT: The objective of the current document is to analyze
the macroeconomic determinants of real wages in Mexico, an economy with a high
degree of integration with the US, under the Hypotheses of Rational
Expectations, through the Generalized Method of Moments (GMM). We estimated an ad
hoc wage-setting equation, to the Mexican economy. The outcomes validate the
existence of a Phillips curve and show that the unemployment is the most
important variable in determining the real salary rates. However, productivity
keeps a close relation with wages, while the inflation expectations play a
secondary role in determining them.