A Wage Curve for the Interwar Labour Market: Evidence from a Panel of Norwegian Manufacturing Industries
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We present an econometric analysis of wage behaviour in Norway during the interwar years. Applying GMM estimation methods to a newly constructed panel of manufacturing industry data, we Þnd that the interwar years do not seem to be such an anomalous time period as has been suggested with respect to wage behaviour. We estimate a long-run wage curve that has all the modern features of being homogeneous in prices, proportional to productivity, and having an unemployment elasticity of -0.1. We also present some new Monte Carlo evidence on the properties of the estimators used.