Wage-Price Setting in New EU Member States
AbstractThis paper analyzes wage- and price-setting relations in new EU member countries. Panel estimates indicate a strong and significant relationship between real wages and labor productivity, as well as evidence of wage pass-through to inflation. Terms of trade shocks do not feed through to real wages. Country-specific wage developments, beyond differences in labor productivity growth, are mostly explained by real wage catch-up from different initial levels and different labor market conditions. Qualitative evidence also suggests that public sector wage demonstration effects and institutional factors may play a role in wage determination.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 08/243.
Date of creation: 01 Oct 2008
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-10-28 (All new papers)
- NEP-CBA-2008-10-28 (Central Banking)
- NEP-EEC-2008-10-28 (European Economics)
- NEP-LAB-2008-10-28 (Labour Economics)
- NEP-MAC-2008-10-28 (Macroeconomics)
- NEP-TRA-2008-10-28 (Transition Economics)
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