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Wage flexibility and the EMU: a nonparametric and semiparametric analysis for the Spanish case

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  • Adolfo Maza

Abstract

According to OCA theory, the creation of the EMU reinforces the role of wage flexibility as an adjustment instrument alternative to the exchange rate in order to mitigate the negative effects of asymmetric shocks. This paper uses the case of Spain as the frame of reference within the EMU - in order to ensure data homogeneity - and examines wage flexibility in the Spanish provinces using both nonparametric and semiparametric techniques. The main result of the paper is that the labour market appears to be quite rigid and, therefore, adverse shocks could have serious consequences in the future.

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  • Adolfo Maza, 2006. "Wage flexibility and the EMU: a nonparametric and semiparametric analysis for the Spanish case," Applied Economics Letters, Taylor & Francis Journals, vol. 13(11), pages 733-736.
    • Handle: RePEc:taf:apeclt:v:13:y:2006:i:11:p:733-736
    DOI: 10.1080/13504850500407624
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    1. Bayoumi, Tamim & Taylor, Mark P, 1995. "Macro-economic Shocks, the ERM, and Tri-polarity," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 321-331, May.
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    3. Abraham, Filip, 1996. "Regional adjustment and wage flexibility in the European Union," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 51-75, February.
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    5. Li, Qi & Stengos, Thanasis, 1996. "Semiparametric estimation of partially linear panel data models," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 389-397.
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    Cited by:

    1. Maczulskij, Terhi, 2013. "Public–private sector wage differentials and the business cycle," Economic Systems, Elsevier, vol. 37(2), pages 284-301.

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