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The objective of the current document is to analyze the macroeconomic determinants of real wages in Mexico, an economy with a high degree of integration with the US, under the Hypotheses of Rational Expectations, through the Generalized Method of Moments (GMM). We estimated an ad hoc wage-setting equation, to the Mexican economy. The outcomes validate the existence of a Phillips curve and show that the unemployment is the most important variable in determining the real salary rates. However, productivity keeps a close relation with wages, while the inflation expectations play a secondary role in determining them.

Macroeconomic Determinants of Real Wages in an Internationally Integrated Economy, Mexico 1998.1-2011.4