| 11. | However, if the figures shown are nominal wages then real wages are not increasing at all.
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| 12. | The same idea can apply to nominal wages.
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| 13. | Second, nominal wage cuts would be difficult to put into effect because of laws and wage contracts.
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| 14. | In a model with nominal wage rigidities, changes in exchange rate implies changes in actual real wage.
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| 15. | On numerous occasions in the 1990s real wages decreased since nominal wages could not keep up with inflation.
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| 16. | Nominal wages increased an average of 13 % per year while real wages rose 7 % each year.
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| 17. | And since it is hard to cut nominal wage rates, price stability could put a floor beneath real wages.
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| 18. | The value of \ lambda ^ * thus determines how rapidly the nominal wage adjusts to its new steady-state value.
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| 19. | If only nominal wages are considered, the conclusion has to be that people used to be significantly poorer than today.
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| 20. | Although nominal wages were rising, there was not a commensurate increase in the standard of living for the Chilean population.
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