Abstract
Several models of the Norwegian system of wage formation are estimated in this thesis. The point of departure is a single-equation error correction model (ECM) for manufacturing wages, while the final model is a simultaneous equation model (SEM) with eight endogenous variables. The estimation yields insight into both short-run and long-run dynamics of the system of wage formation. The results indicate that manufacturing wages error correct with the manufacturing wage scope. Further, there are signs of pattern wage bargaining throughout the modeling, with manufacturing as the wage-leading sector. The estimation results indicate that inflation expectations significantly influence the manufacturing wage growth in the short-run. Inflation expectations affect wages in other sectors as well through the wage formation in the exporting sector. The estimation of the SEM shows similar results as for the recursive system. Finally, results from the estimation in this thesis indicate that a Phillips curve approach to modeling the system of Norwegian wage formation is not supported. However, principles from the Odd Aukrust's Main Course framework seem to have empirical support throughout the estimation.