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|
|Date of revision:|
|Contact details of provider:|| Postal: |
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.:
- 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, . "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.
- 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.
- Maurice Obstfeld, 1997. "Europe's gamble," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 241-317.
- Fidrmuc, Jan, 2003.
"Migration and Regional Adjustment to Asymmetric Shocks in Transition Economies,"
CEPR Discussion Papers
3798, C.E.P.R. Discussion Papers.
- 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.
- Jan Fidrmuc, 2002. "Migration and regional adjustment to asymmetric shocks in transition economies," CPB Discussion Paper 7, CPB Netherlands Bureau for Economic Policy Analysis.
- 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, ZEI - Center for European Integration Studies, University of Bonn.
- 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.
- 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.
- 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, November.
- 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.
- 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.
- Tito Boeri & Herbert Brücker, 2005. "Why are Europeans so tough on migrants?," Economic Policy, CEPR;CES;MSH, vol. 20(44), pages 629-703, October.
- 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 1254-75, December.
- 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.
- 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 141-55, May.
- International Monetary Fund, 2001. "Labor Markets in Hard-Peg Accession Countries: The Baltics and Bulgaria," IMF Staff Country Reports 01/100, International Monetary Fund.
- Tyrvainen, Timo, 1995. "Wage Setting, Taxes and Demand for Labour: Multivariate Analysis of Cointegrating Relations," Empirical Economics, Springer, vol. 20(2), pages 271-97.
- 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 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.
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 you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.