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Real wages, inflation, and labor productivity: Evidences from Bulgaria and Romania

Author

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  • Chaido Dritsaki

    (Associate Professor, Department of Accounting and Finance, Western Macedonia University of Applied Sciences, Kozani, Greece.)

Abstract

This study examines the effect of inflation and real wages on labor productivity for two European Union(EU) countries: Bulgaria and Romania using cointegration Autoregressive Distributed Lag (ARDL) test and causality test of Toda and Yamamoto (1995). Results suggest that inflation reduces labor productivity. Moreover, the impact of wages on labor productivity is far greater the impact of inflation. Additionally, there exists unidirectional relation between inflation and real wages for Bulgaria, and real wages and labor productivity for Romania.

Suggested Citation

  • Chaido Dritsaki, 2016. "Real wages, inflation, and labor productivity: Evidences from Bulgaria and Romania," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(5), pages 24-36, October.
    • Handle: RePEc:lrc:lareco:v:4:y:2016:i:5:p:24-36
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