This paper discusses the interrelations between real wages, the real exchange rate and productivity in the Brazilian economy during the nineties. This period is particularly interesting as it combined trade liberalization, the valorization of the Real and relatively high rates of growth of labor productivity. With this objective, a VEC model was used to test a theoretical model based on monopolisitic competition. The model predicted correctly the association between real wages and productivity, but it did not perform well as regards real wages and unemployment.
productivity; wages; exchange rate; VAR models
