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Federal Reserve Economists consider average hours worked and average hourly earnings as key factors in explaining inflation trends. In this study, we look at the trends in hours worked and average hourly earnings from 2006-2015. We also look at the period 2009-2015 to see if the hours worked and earnings trends have materially changed after the 2008 recession. Demand pull effects are evident in both hours worked and earnings if they exhibit upward trend patterns. Using linear trend equations, we hypothesize that if the b coefficients are >0 demand pull inflation forces are at work in the economy. A flat or downward sloping trend line i.e. (b=0 or b<0) would indicate that demand pull inflation effects, at the margin, do not exist.

Publication Date


Project Designation

Independent Research

Primary Advisor

Trevor C Collier

Primary Advisor's Department

Economics & Finance


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Hours Worked and Earnings: A Closer Look At Demand Pull Effects on Inflation