ABSTRACT
This chapter examines recent developments in the labor market to determine whether special factors have been operative in restraining money-wage inflation. In considering how international trade variables affect money-wage adjustments, it would seem that exchange-rate changes should have the longest lags. The time-series analysis examines quarterly changes in fixed-weight indices of average hourly earnings. The export and import trade-share variables, percentages of real gross domestic product, document the gradual opening up of the US economy that has been occurring. Only a limited number of studies have used time-series data to estimate the effect of foreign trade on money-wage adjustments in the United States. The time-series analysis examines quarterly changes in fixed-weight indices of average hourly earnings. To conclude, several factors besides the increased openness of the economy have been contributing to the persistence of high relative unemployment among adult men during the current recovery.
