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Unit Labor Cost In Romania

Author

Listed:
  • Ghizdeanu, Ion

    (National Commission of Prognosis, Bucharest)

  • Tudorescu, Veronica

    (National Commission of Prognosis)

Abstract

The paper is meant to lead the way in the field of economic analysis in Romania, trying to evaluate by data the capacity of the Romanian economy to face the competition pressures from the Single European Market. Within the paper, the unit labor cost is approached as an indicator reflecting especially the competitiveness rather than measuring it. The methodological and calculation issues differentiate between the unit labor cost in nominal and real terms, emphasizing the conclusion that exceeding the compensation per employee (including the employer's social contribution) beyond labor productivity, in real terms leads to an increase in the unit labor cost and, finally, to a loss of competitiveness. In addition, the paper includes the forecast of the unit labor cost in Romania, which has been developed for the first time since 2005. Subsequently, the estimates have been updated for each stage of forecasting. In this way, having in view the expected trends for the indicators involved in the estimate, the final conclusion of the paper is to maintain competitiveness and the current account within sustainable limits, despite the disinflation process under way. The finding is all the more eloquent, as the EC autumn forecast underlines this issue.

Suggested Citation

  • Ghizdeanu, Ion & Tudorescu, Veronica, 2007. "Unit Labor Cost In Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(1), pages 57-64, March.
    • Handle: RePEc:rjr:romjef:v:4:y:2007:i:1:p:57-64
    as

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    File URL: http://www.ipe.ro/rjef/rjef1_07/rjef1_07_4.pdf
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    References listed on IDEAS

    as
    1. Dobrescu, Emilian, 2002. "Macromodel Estimation for the Romanian "Pre-Accession Economic Programme"," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(5), pages 5-38, December.
    2. Ark, Bart van & Stuivenwold, Edwin & Ypma, Gerard, 2005. "Unit labour costs, productivity and international competitiveness," GGDC Research Memorandum 200580, Groningen Growth and Development Centre, University of Groningen.
    3. Nicolas Carnot & Vincent Koen & Bruno Tissot, 2005. "Economic Forecasting," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-00581-5.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Nae Tatiana-Roxana, 2009. "Competitiveness And Unit Labour Costs In Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 2(1), pages 444-450, May.

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    More about this item

    Keywords

    labor productivity; compensation of employees; employment; GDP; unit labor cost;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

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