Wage-settingpatternsandmonetarypolicy: Internationalevidence

Systematicdifferencesinthetimingofwage-settingdecisionsamongindustrialized countriesprovideanidealframeworktostudytheimportanceofwagerigidityforthe transmissionofmonetarypolicy.Synchronizationinwage-settingdecisionsisprevalent in JapanandtheUnitedStates,yieldingvaryingdegreesofwagerigiditywithinthe year; instead,inFrance,Germany,andtheUnitedKingdomdecisionsaremore uniformlyspreadovertime.Exploitingwithin-yearvariationinthetimingofwage- settingdecisionsintheseeconomies,wefindsupportforthelong-heldbutscarcely testedviewthatwagerigidityplaysacriticalroleinthetransmissionofmonetary policy.