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Small-system modelling of real wages, inflation, unemployment and output per capita in Italy 1970-1994

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  • Massimiliano Marcellino

    (Istituto di Economia Politica, and IGIER, Bocconi University, Milan, Italy)

  • Grayham E. Mizon

    (Economics Department, Southampton University, UK)

Abstract

The relationships between real wages, output per capita, inflation and unemployment in Italy between 1970 and 1994 are modelled using a cointegrated vector autoregression. There is evidence of a change in the underlying equilibria and in the dynamic evolution of the variables, probably associated with the substantial changes in many sectors of the Italian economy after 1979. Alternative ways to model structural change in the Italian labour market are considered. In adopting a split-sample approach the results favour an hysteresis interpretation of unemployment. Copyright © 2001 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics.

Volume (Year): 16 (2001)
Issue (Month): 3 ()
Pages: 359-370

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Handle: RePEc:jae:japmet:v:16:y:2001:i:3:p:359-370

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Cited by:
  1. Rita Duarte & Carlos Robalo Marques, 2009. "The dynamic effects of shocks to wages and prices in the United States and the Euro Area," Working Papers w200915, Banco de Portugal, Economics and Research Department.
  2. Melike Bildirici & Elçin Aykaç Alp, 2012. "Minimum wage is efficient wage in Turkish labor market: TAR–cointegration analysis," Quality & Quantity: International Journal of Methodology, Springer, vol. 46(4), pages 1261-1270, June.
  3. Massimiliano Marcellino & Grayham E. Mizon & Hans-Martin Krolzig, 2002. "A Markov-switching vector equilibrium correction model of the UK labour market," Empirical Economics, Springer, vol. 27(2), pages 233-254.
  4. Eilev S. Jansen, 2004. "Modelling inflation in the Euro Area," Working Paper 2004/10, Norges Bank.
  5. Binotti, Annetta Maria & Ghiani, Enrico, 2008. "Changes in aggregate supply conditions in Italy: A small econometric model and its policy implications," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1017-1039.
  6. Guglielmo Barone & Sauro Mocetti, 2014. "Natural disasters, growth and institutions: a tale of two earthquakes," Temi di discussione (Economic working papers) 949, Bank of Italy, Economic Research and International Relations Area.
  7. Sauro Mocetti & Guglielmo Barone, 2013. "Natural disasters, economic growth and corruption: a tale from two earthquakes," ERSA conference papers ersa13p726, European Regional Science Association.
  8. Kurita, Takamitsu, 2010. "Empirical modeling of Japan's markup and inflation, 1976-2000," Journal of Asian Economics, Elsevier, vol. 21(6), pages 552-563, December.
  9. Jolejole-Foreman, Maria Christina & Mallory, Mindy L. & Baylis, Katherine R., 2013. "Impact of Wheat and Rice Export Ban on Indian Market Integration," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150595, Agricultural and Applied Economics Association.
  10. Girardi, Riccardo & Paruolo, Paolo, 2013. "Wages and prices in Europe before and after the onset of the Monetary Union," Economic Modelling, Elsevier, vol. 35(C), pages 643-653.

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