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The Impact of Compensation Growth on Inflation Rate and Unemployment

Author

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  • Bianca COSTACHE

    (The Bucharest University of Economics Studies)

Abstract

The study analyzes the manner in which the growth rate of employees’ compensation impacts both inflation rate and unemployment rate. The objective of the study is to identify, analyze and evaluate the effects of the compensation’s growth on inflation and unemployment for five countries: Bulgaria, Czech Republic, Hungary, Poland and Romania with quarterly data collected for the period between 2000 - 2018. The results of the study proved to be important as it indicates the variation in the effects of compensation of employees on each indicator due to the pecularity of each country, as well as the manner in which every economy responds to a positive impact given by the growth of the general wage level.

Suggested Citation

  • Bianca COSTACHE, 2018. "The Impact of Compensation Growth on Inflation Rate and Unemployment," Hyperion Economic Journal, Faculty of Economic Sciences, Hyperion University of Bucharest, Romania, vol. 6(1), pages 27-32, March.
    • Handle: RePEc:hyp:journl:v:6:y:2018:i:1:p:27-32
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    References listed on IDEAS

    as
    1. Bhattarai, Keshab, 2016. "Unemployment–inflation trade-offs in OECD countries," Economic Modelling, Elsevier, vol. 58(C), pages 93-103.
    2. James H. Stock & Mark W. Watson, 2001. "Vector Autoregressions," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 101-115, Fall.
    3. Bhattarai, Keshab & Mallick, Sushanta, 2013. "Impact of China's currency valuation and labour cost on the US in a trade and exchange rate model," The North American Journal of Economics and Finance, Elsevier, vol. 25(C), pages 40-59.
    4. Cover, James P. & Mallick, Sushanta K., 2012. "Identifying sources of macroeconomic and exchange rate fluctuations in the UK," Journal of International Money and Finance, Elsevier, vol. 31(6), pages 1627-1648.
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    More about this item

    Keywords

    compensation; inflation; unemployment; cointegration; causality;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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