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Wages, Prices, Productivity, Inflation and Unemployment in Italy 1970-1994

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  • Massimiliano Marcellino

    (Instituto di Economia Politica and IGIER)

  • Grayham E. Mizon

    (Southampton University)

Abstract

The relationships between wages, prices, productivity, 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, including choice of lag length, the use of dummy variables, modelling conditionally on related macroeconomic variables, and modelling separate regimes. In adopting a split sample approach the results favour an hysteresis interpretation of unemployment.

Suggested Citation

  • Massimiliano Marcellino & Grayham E. Mizon, 2000. "Wages, Prices, Productivity, Inflation and Unemployment in Italy 1970-1994," Econometric Society World Congress 2000 Contributed Papers 0911, Econometric Society.
    • Handle: RePEc:ecm:wc2000:0911
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    References listed on IDEAS

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    1. Mateos-Planas, X., 1998. "Education, technology adoption and productivity," Discussion Paper Series In Economics And Econometrics 9817, Economics Division, School of Social Sciences, University of Southampton.
    2. Mohieldin, M. & Wahba, J., 1996. "The Urguay Round and trade in financial services in the Arab countries," Discussion Paper Series In Economics And Econometrics 9617, Economics Division, School of Social Sciences, University of Southampton.
    3. Sola, M. & Ravn, M.O., 1992. "The use of recursive variance plots: a note," Discussion Paper Series In Economics And Econometrics 9217, Economics Division, School of Social Sciences, University of Southampton.
    4. Qizilbash, M., 1994. "Decisions and moral character," Discussion Paper Series In Economics And Econometrics 9417, Economics Division, School of Social Sciences, University of Southampton.
    5. Marcellino, Massimiliano & Mizon, Grayham E., 2000. "Modelling shifts in the wage-price and unemployment-inflation relationships in Italy, Poland and the UK," Economic Modelling, Elsevier, vol. 17(3), pages 387-413, August.
    6. Chiarini, B., 1993. "Persistence, comovement and common trends: an empirical study of disaggregated Italian output and labour input," Discussion Paper Series In Economics And Econometrics 9317, Economics Division, School of Social Sciences, University of Southampton.
    7. Sujoy Mukerji, 1996. "Understanding the nonadditive probability decision model (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 9(1), pages 23-46.
    8. Hendricks, K. & Piccione, M. & Tan, G., 1997. "Equilibria in networks," Discussion Paper Series In Economics And Econometrics 9717, Economics Division, School of Social Sciences, University of Southampton.

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