TY  - RPRT
        AU  - Messina, Julián
AU  - Sanz-de-Galdeano, Anna
        TI  - Wage Rigidity and Disinflation in Emerging Countries
        PY  - 2011/Jun/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5778
        UR  - https://www.iza.org/index.php/publications/dp5778
        AB  - This paper examines the consequences of rapid disinflation for downward wage rigidities in two emerging countries, Brazil and Uruguay, relying on high quality matched employer-employee administrative data. Downward nominal wage rigidities are more important in Uruguay, while wage indexation is dominant in Brazil. Two regime changes are observed during the sample period, 1995-2004: (i) in Uruguay wage indexation declines, while workers' resistance to nominal wage cuts becomes more pronounced; and (ii) in Brazil, the introduction of inflation targeting by the Central Bank in 1999 shifts the focal point of wage negotiations from changes in the minimum wage to expected inflation. These regime changes cast doubts on the notion that wage rigidity is structural in the sense of Lucas (1976).
        KW  - matched employer-employee data
KW  - indexation
KW  - downward wage rigidity
KW  - emerging economies
        ER  -