Cyclical behavior of real wages in Japan

- This paper studies the cyclicality of aggregate real wages in Japan.
- Both static and dynamic approaches are used to measure the cyclicality of real wages.
- The cyclicality of real wages is sensitive to deflators used.

This paper studies the cyclicality of aggregate real wages in Japan. By using both static and dynamic approaches, I measure comovements between real wages and business cycle indicators. This paper finds that while real wages constructed using the consumer price index and the GDP deflator are procyclical, real wages constructed using the producer price index are countercyclical. This result is robust to the data and methods used to compute the comovements.