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Nominal earnings rose by 5.2% in the year to March.
The corollary of low inflation is low nominal earnings growth.
That means the growth rate of nominal earnings tends to rise and fall with inflation.
Many investors overlook that point, because they assume that changes in inflation will not affect nominal earnings growth.
We expect weak productivity to constrain nominal earnings growth for longer, with a slower fall in inflation delaying the pick-up in real incomes.
But the professors say nominal earnings historically have grown faster when inflation is rising, keeping the growth rate of real earnings more or less constant.
Similar(43)
Since the adjustment of the covered earnings ceiling depends on nominal wage growth, if inflation takes off or if real wages grow even more rapidly, the covered earnings ceiling will grow at an even faster pace.
If nominal average earnings were to increase more than labour productivity, labour cost per unit of output would rise and so would prices unless profit margins were reduced to compensate.
That, says Capital Economics, is perfectly reasonable.the price of the stock market will rise if the Treasury yield falls, provided that the latter's decline is not more than offset by some combination of a rise in the equity risk premium or a drop in the expected growth rate of nominal EPS (earnings per share)The logic is impeccable.
In nominal baht earnings, it is surprising to find that the growth of exports after 1997 is lower than in the 1995-1997 period.
Similarly, fiscal policy affects real earnings to different degrees for different people but it is not the sole determinant of nominal wage growth or inflation.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com