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Recent Developments in the Linkage between Wages and Prices


May 10, 2024
OZAKI Tatsuya, JIMBO Masahiro, YAGI Tomoyuki, YOSHII Akihito
Research and Statistics Department


The prices of many items making up the CPI are affected by past significant fluctuations in import prices. As a result, it is not easy to identify upward pressure on prices stemming from the linkage between wages and prices. In this article, a number of different approaches are used to quantitatively measure the linkage between wages and prices. Results of analyses based on cost structures of items making up the CPI and analyses using time-series models suggest that moves to reflect wage increases in output prices are gradually spreading. It is important to determine developments in the linkage between wages and prices by continuously carrying out quantitative analyses from various standpoints including those approaches taken in this article, as well as by conducting qualitative analyses, such as interviews with firms, carefully.


The Bank of Japan Review Series is published by the Bank to explain recent economic and financial topics for a wide range of readers. This report, 2024-E-2, is a translation of the Japanese original, 2024-J-2, published in February 2024. Views expressed are those of the authors and do not necessarily reflect those of the Bank.

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