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Raising the Flexibility of the Slovak Economy during the Catch-Up Phase

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Author Info
Isabell Koske

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Abstract

As in other catch-up countries inflation is likely to stay high going forward due to nominal convergence. To better cope with the risk of a too rapid pick up of wages during the convergence process on the one hand and to raise the adjustment potential of the economy to macroeconomic shocks on the other, labour and product market flexibility is essential. Three main areas for improvement are discussed in this chapter. First, wage flexibility should be safeguarded by avoiding significant increases in minimum wages and by abolishing legal extension of collective wage settlements. Second, competition needs to be strengthened, especially in the liberal professions where entry and conduct regulation should be eased. In addition, the points of single contact that already exist for small enterprises should be extended to entrepreneurs of the liberal professions. Third, a wider use of information and communication technology (ICT) could lead to important productivity gains. Removing obstacles to the spread of e-business and a swift implementation of e-government are imperative. This Working Paper relates to the 2009 OECD Economic Survey of the Slovak Republic.

Accroître la flexibilité de l’économie slovaque durant la phase de rattrapage
Comme dans les autres pays en phase de rattrapage, l’inflation devrait rester élevée à l’avenir sous l’effet du phénomène de convergence nominale. Pour mieux parer aux risques d’augmentation trop rapide des salaires au cours du processus de convergence, d’une part, et pour accroître les possibilités d’ajustement de l’économie aux chocs macroéconomiques, d’autre part, il est indispensable que le marché du travail et les marchés de produits soient flexibles. On examinera dans ce chapitre les trois principaux domaines où des améliorations devraient être réalisées. Premièrement, il faudrait préserver la flexibilité des salaires en évitant de fortes hausses du salaire minimum et en mettant fin à l’extension des conventions collectives salariales. Deuxièmement, la concurrence doit être renforcée, surtout dans les professions libérales, où il faudrait assouplir l’entrée et les conditions d’exercice. De plus, il serait souhaitable d’étendre aux professions libérales les guichets uniques qui existent déjà pour les petites entreprises. Troisièmement, la productivité pourrait sensiblement progresser si on utilisait plus largement les technologies de l’information et de la communication (TIC). Il est impératif de supprimer les obstacles à la diffusion du commerce électronique et de mettre en placer rapidement l’administration électronique. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la République slovaque 2009.

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Paper provided by OECD, Economics Department in its series OECD Economics Department Working Papers with number 680.

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Date of creation: 06 Mar 2009
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Handle: RePEc:oec:ecoaaa:680-en

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Related research
Keywords: labour market flexibility; nominal convergence; product market flexibility; Slovak Republic; convergence nominale; flexibilité du marché des biens; flexibilité du marché du travail; République slovaque;

Find related papers by JEL classification:
D4 - Microeconomics - - Market Structure and Pricing
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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This page was last updated on 2009-11-23.

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