Aggregate Wage Flexibility in Selected New EU Member States
A fixed exchange rate regime eliminates one degree of freedom in absorbing macroeconomic shocks. Therefore, there is a call for higher labor market flexibility in countries which are members of the monetary union or those which intend to join the monetary union. Focusing on the cross-country analysis of labor markets in the enlarged European Union, this paper aims to assess empirically the role of aggregate wages as a correction mechanism for dealing with economic disturbances. A comparable quarterly data-set is constructed covering 1995-2004 for four central European states (CE-4), four new EU members already participating in the Exchange Rate Mechanism-II (ERM-II participants), and three peripheral members of the euro area (EMU- 3). We apply classical time series/panel, Bayesian, and cointegration techniques to determine the extent to which aggregate wages can accommodate shocks in the economy. The macroeconomic data does not seem to support the argument that real wages are flexible in the CE-4, the ERM-II participants, and the EMU-3.
|Date of creation:||Apr 2006|
|Contact details of provider:|| Postal: Na Prikope 28, 115 03 Prague 1|
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page: http://www.cnb.cz/en/research/research_intro/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jan Fidrmuc, 2002.
"Migration and regional adjustment to asymmetric shocks in transition economies,"
CPB Discussion Paper
7, CPB Netherlands Bureau for Economic Policy Analysis.
- Fidrmuc, Jan, 2004. "Migration and regional adjustment to asymmetric shocks in transition economies," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 230-247, June.
- Fidrmuc, Jan, 2003. "Migration and Regional Adjustment to Asymmetric Shocks in Transition Economies," CEPR Discussion Papers 3798, C.E.P.R. Discussion Papers.
- Iara, Anna & Traistaru, Iulia, 2004.
"How flexible are wages in EU accession countries?,"
Elsevier, vol. 11(4), pages 431-450, August.
- Anna Iara & Iulia Traistaru, 2004. "How Flexible are Wages in EU Accession Countries?," ERSA conference papers ersa04p191, European Regional Science Association.
- Anna Iara & Iulia Traistaru, 2004. "How Flexible Are Wages In EU Accession Countries?," Royal Economic Society Annual Conference 2004 128, Royal Economic Society.
- Iara, Anna & Traistaru, Iulia, 2003. "How flexible are wages in EU accession countries?," ZEI Working Papers B 25-2003, University of Bonn, ZEI - Center for European Integration Studies.
- Alogoskoufis, George S & Smith, Ron, 1991. "The Phillips Curve, the Persistence of Inflation, and the Lucas Critique: Evidence from Exchange-Rate Regimes," American Economic Review, American Economic Association, vol. 81(5), pages 1254-1275, December.
- Juan C. Botero & Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004.
"The Regulation of Labor,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 119(4), pages 1339-1382.
- Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Juan Botero, 2003. "The Regulation of Labor," NBER Working Papers 9756, National Bureau of Economic Research, Inc.
- Botero, J. C. & Djankov, S. & Porta, R. L. & Lopez-de-Silanes, F. & Shleifer, Andrei, 2004. "The Regulation of Labor," Scholarly Articles 27867241, Harvard University Department of Economics.
- Juan Botero & Simeon Djankov & Rafael LaPorta & Florencio López-de-Silanes & Andrei Shleifer, "undated". "The Regulation of Labor," Working Paper 19483, Harvard University OpenScholar.
- Hughes Hallett, Andrew J & Ma, Yue & Demertzis, Maria, 2000. "The Single Currency and Labour Market Flexibility: A Necessary Partnership?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(2), pages 141-155, May.
- Marcellino, M. & Mizon, G.E., 1999.
"Modelling shifts in the wage-price and unemployment-inflation relationships in Italy, Poland, and the UK,"
Discussion Paper Series In Economics And Econometrics
9917, Economics Division, School of Social Sciences, University of Southampton.
- Marcellino, Massimiliano & Mizon, Grayham E., 2000. "Modelling shifts in the wage-price and unemployment-inflation relationships in Italy, Poland and the UK," Economic Modelling, Elsevier, vol. 17(3), pages 387-413, August.
- Massimiliano Marcellino & Grayham E. Mizon, "undated". "Modelling shifts in the wage-price and unemployment-inflation relationships in Italy, Poland, and the UK," Working Papers 145, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
- Dibooglu, Selahattin & Enders, Walter, 2001. "Do Real Wages Respond Asymmetrically to Unemployment Shocks? Evidence from the U.S. and Canada," Journal of Macroeconomics, Elsevier, vol. 23(4), pages 495-515, October.
- Tito Boeri & Herbert Brücker, 2005. "Why are Europeans so tough on migrants?," Economic Policy, CEPR;CES;MSH, vol. 20(44), pages 629-703, October.
- PLASMANS, Joseph & MEERSMAN, Hilde & VAN POECK, André & MERLEVEDE, Bruno, 2002. "The unemployment benefit system and wage flexibility in EMU: time-varying evidence in five countries," Working Papers 2002020, University of Antwerp, Faculty of Applied Economics.
- Anne Marie Gulde & Juha KÃ¤hkÃ¶nen & Peter M Keller, 2000. "Pros and Cons of Currency Board Arrangements in the Lead-Up to EU Accession and Participation in the Euro Zone," IMF Policy Discussion Papers 00/1, International Monetary Fund.
- International Monetary Fund, 2001. "Labor Markets in Hard-Peg Accession Countries: The Baltics and Bulgaria," IMF Staff Country Reports 01/100, .
- Kamil Galušèák & Daniel Münich, 2005. "Regional Wage Adjustments and Unemployment: Estimating the Time-Varying Wage Curve (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 55(1-2), pages 68-82, January.
- Artur Radziwill & Mateusz Walewski, 2003. "Future EMU Membership and Wage Flexibility in Selected EU Candidate Countries," CASE Network Studies and Analyses 0265, CASE-Center for Social and Economic Research.
- Tyrvainen, Timo, 1995. "Wage Setting, Taxes and Demand for Labour: Multivariate Analysis of Cointegrating Relations," Empirical Economics, Springer, vol. 20(2), pages 271-297.
- Vladislav Flek & Kamil Galuscak & Jaromir Gottvald & Jaromir Hurnik & Stepan Jurajda & David Navratil & Petr Mares & Daniel Munich & Tomas Sirovatka & Jiri Vecernik, 2004. "Anatomy of the Czech Labour Market:From Over-Employment to Under-Employment in Ten Years?," Working Papers 2004/07, Czech National Bank, Research Department.
- Thomas Hyclak & Geraint Johnes, 1992. "Wage Flexibility and Unemployment Dynamics in Regional Labor Markets," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wfud, 06.
- Maurice Obstfeld, 1997. "Europe's Gamble," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 241-317.
When requesting a correction, please mention this item's handle: RePEc:cnb:wpaper:2006/1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Babecky)
If references are entirely missing, you can add them using this form.