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Relationship between Unemployment and Wages at the Regional Level in the Czech Republic in the Period 2003-2010

Author

Listed:
  • Michal Šulc

    () (The College of Polytechnics Jihlava)

  • Jana Borůvková

    () (The College of Polytechnics Jihlava)

  • Roman Fiala

    () (The College of Polytechnics Jihlava)

Abstract

The subject of the article is the relationship between unemployment and wages at the regional level in the Czech Republic in the period 2003-2010. The aim of the authors was to verify the construction possibility and validity of regional wage and Phillips curves both in the regions and at the national level. The analysis was done by means of linear regression models on the quarter data basis. The results for the period 2003-2008 show the wage curve validity both at the regional and national level. It is impossible to construct the wage curve in the period 2009-2010, for despite the big unemployment rise the wages remained steady during this time. This fact supports the idea of short time downwards rigidity of wages. In 2003-2008, contrary to 2009-2010, it is possible to say the Phillips curve was valid at the national level, for the unemployment rate decrease leaded to the increase of the wage growth rate. In particular regions with a few exceptions this relationship was not valid, which supports theoretical findings about the impossibility of the Phillips curve construction at lower than the national level.

Suggested Citation

  • Michal Šulc & Jana Borůvková & Roman Fiala, 2012. "Relationship between Unemployment and Wages at the Regional Level in the Czech Republic in the Period 2003-2010," Acta Universitatis Bohemiae Meridionales, University of South Bohemia in Ceske Budejovice, vol. 15(1), pages 91-101.
  • Handle: RePEc:boh:actaub:v:15:y:2012:i:1:p:91-101
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    More about this item

    Keywords

    Phillips Curve; Wage Curve; Regions; Wage Inflation; Unemployment;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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