A Tale of Two Neighbour Economies: Labour Market Dynamics in Spain and Portugal
AbstractSpain and Portugal are two neighbour economies which share many characteristics. Spanish unemployment is more than double Portuguese unemployment, however. In this chapter we resort to Structural Vector Autoregression (SVAR) techniques to ascertain which shocks and what propagation mechanism underlie the functioning of the labour markets in both countries. Our results show that price adjustment is more sticky and that real wage flexibility is higher in Portugal. In line with this evidence, we find that, although shocks hitting both economies since the beginning of the eighties were not too dissimilar, their effects on unemployment were much more long-lasting in Spain than in Portugal.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1954.
Date of creation: Aug 1998
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Find related papers by JEL classification:
- E24 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General
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- Dimitrios D. Thomakos & Constantina Kottaridi & Diego MŽndez-Carbajo, 2007.
"Inflation Dynamics and the Cross-Sectional Distribution of Prices in the E.U. Periphery,"
Working Paper Series
43-07, The Rimini Centre for Economic Analysis, revised Jul 2007.
- Constantina Kottaridi & Diego Mendez-Carbajo & Dimitrios Thomakos, 2007. "Inflation Dynamics and the Cross-Sectional Distribution of Prices in the E.U. Periphery," Working Papers 0004, University of Peloponnese, Department of Economics.
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