RDP 9006: Wage Contracts, Sticky Prices and Exchange Rate Volatility: Evidence from Nine Industrial Countries
Equation (4b)
w
t
−
t
−
3
w
t
=
(
1
/
n
)
(
t
−
2
w
n
−
1
o
t
−
1
−
t
−
3
w
n
−
1
o
t
−
1
+
t
−
1
w
n
o
t
−
t
−
3
w
n
o
t
)
+
(
(
1
−
θ
)
/
n
)
(
(
t
−
2
p
c
t
−
t
−
2
p
c
t
−
1
)
−
(
t
−
3
p
c
t
−
t
−
3
p
c
t
−
1
)
)
−
(
θ/n
)
(
t
−
2
p
c
t
−
1
−
t
−
3
p
c
t
−
1
)
+
(
n
−
2
)
(
θ/n
)
(
p
c
t
−
2
−
t
−
3
p
c
t
−
2
)
+
(
n
−
1
)
(
θ/n
)
(
p
C
t
−
1
−
t
−
3
p
c
t
−
1
)
.
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