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The effects of alternative wage regimes in a monetary union: A multi-country agent based-stock flow consistent model

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  • Caiani, Alessandro
  • Catullo, Ermanno
  • Gallegati, Mauro

Abstract

The Eurozone crisis has revitalized the debate between economists on the role played by wages in open economies. Salaries paid to workers are at the same time a fundamental source of aggregate demand and a determinant of firms’ international cost competitiveness. The paper investigates how alternative wage growth patterns impact on the economic dynamics of an artificial Monetary Union. For this sake, we perform several experiments employing the Agent Based-Stock Flow Consistent (AB-SFC) Multi-Country model first presented in Caiani et al. (2018a).

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  • Caiani, Alessandro & Catullo, Ermanno & Gallegati, Mauro, 2019. "The effects of alternative wage regimes in a monetary union: A multi-country agent based-stock flow consistent model," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 389-416.
  • Handle: RePEc:eee:jeborg:v:162:y:2019:i:c:p:389-416
    DOI: 10.1016/j.jebo.2018.12.023
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    Keywords

    Agent-based macroeconomics; Stock flow consistent models; European integration; Wages; Trade imbalances; Schumpeterian Competition;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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