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Modelling shifts in the wage-price and unemployment-inflation relationships in Italy, Poland, and the UK

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  • Massimiliano Marcellino
  • Grayham E. Mizon

Abstract

The relationship between wages, prices, productivity, inflation, and unemployment in Italy, Poland, and the UK between the 1960’s and the early 1990’s is modelled as a cointegrated vector autoregression subject to regime shifts. For each of these economies there is clear evidence of a change in the underlying equilibria of this sector of the economy. Hypotheses concerning the similarity of the transition from a rigid to a flexible labour market are tested.

Suggested Citation

  • 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.
  • Handle: RePEc:igi:igierp:145
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    References listed on IDEAS

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    1. Banerjee, Anindya & Dolado, Juan J. & Galbraith, John W. & Hendry, David, 1993. "Co-integration, Error Correction, and the Econometric Analysis of Non-Stationary Data," OUP Catalogue, Oxford University Press, number 9780198288107.
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    5. Christopher Erickson & Andrea Ichino, 1995. "Wage Differentials in Italy: Market Forces, Institutions, and Inflation," NBER Chapters,in: Differences and Changes in Wage Structures, pages 265-306 National Bureau of Economic Research, Inc.
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    11. Bontemps, Christophe & Mizon, Grayham E., 2001. "Congruence and encompassing," Discussion Paper Series In Economics And Econometrics 0107, Economics Division, School of Social Sciences, University of Southampton.
    12. Marcellino, Massimiliano, 1999. "Some Consequences of Temporal Aggregation in Empirical Analysis," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 129-136, January.
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    15. Hansen, Bruce E., 1992. "Testing for parameter instability in linear models," Journal of Policy Modeling, Elsevier, vol. 14(4), pages 517-533, August.
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    Cited by:

    1. Mourmouras, Iannis A. & Ghosh, Sugata, 2000. "Fiscal Policies and the Terms of Trade in an Endogenous Growth Model with Overlapping Generations," Journal of Macroeconomics, Elsevier, vol. 22(3), pages 445-470, July.
    2. Binotti, Annetta Maria & Ghiani, Enrico, 2008. "Changes in aggregate supply conditions in Italy: A small econometric model and its policy implications," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 1017-1039.
    3. Cook, S., 1996. "Econometric methodology II: the role of the philosophy of science," Discussion Paper Series In Economics And Econometrics 9619, Economics Division, School of Social Sciences, University of Southampton.
    4. Ulph, A. & Valentini, L., 1998. "Is environmental dumping greater when firms are footloose?," Discussion Paper Series In Economics And Econometrics 9819, Economics Division, School of Social Sciences, University of Southampton.
    5. Hall, Stephen & Mizon, Grayham E. & Welfe, Aleksander, 2000. "Modelling economies in transition: an introduction," Economic Modelling, Elsevier, vol. 17(3), pages 339-357, August.
    6. Robalo Marques, Carlos, 2008. "Wage and price dynamics in Portugal," Working Paper Series 945, European Central Bank.
    7. Krolzig, Hans-Martin & Marcellino, Massimiliano & Mizon, Grayham E., 2000. "A Markov-switching vector equilibrium correction model of the UK labour market," Discussion Paper Series In Economics And Econometrics 0105, Economics Division, School of Social Sciences, University of Southampton.
    8. Ian Babetskii, 2006. "Aggregate Wage Flexibility in Selected New EU Member States," Working Papers 2006/1, Czech National Bank, Research Department.
    9. Jesus Otero & Manuel Ramirez, 2002. "On the determinants of the inflation rate in Colombia: a disequilibrium market approach," BORRADORES DE INVESTIGACIÓN 003296, UNIVERSIDAD DEL ROSARIO.
    10. Rita Duarte & Carlos Marques, 2013. "The dynamic effects of shocks to wages and prices in the United States and the Euro Area," Empirical Economics, Springer, vol. 44(2), pages 613-638, April.
    11. Massimiliano Marcellino & Grayham E. Mizon & Hans-Martin Krolzig, 2002. "A Markov-switching vector equilibrium correction model of the UK labour market," Empirical Economics, Springer, vol. 27(2), pages 233-254.
    12. Ana Maria Iregui & Jesus Otero, 2003. "On the dynamics of unemployment in a developing economy: Colombia," Applied Economics Letters, Taylor & Francis Journals, vol. 10(14), pages 895-898.
    13. Rayner, J., 1992. "Identification of structural VARs," Discussion Paper Series In Economics And Econometrics 9219, Economics Division, School of Social Sciences, University of Southampton.
    14. MacLeod, W.B. & Malcomson, J.M., 1993. "Motivation, markets and dual economies," Discussion Paper Series In Economics And Econometrics 9319, Economics Division, School of Social Sciences, University of Southampton.
    15. Jolejole-Foreman, Maria Christina & Mallory, Mindy L. & Baylis, Katherine R., 2013. "Impact of Wheat and Rice Export Ban on Indian Market Integration," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150595, Agricultural and Applied Economics Association.
    16. David F. Hendry & Massimiliano Marcellino & Chiara Monfardini, 2008. "Foreword," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(s1), pages 711-714, December.
    17. Qizilbash, M., 1994. "Corruption, temptation and guilt: moral character in economic theory," Discussion Paper Series In Economics And Econometrics 9419, Economics Division, School of Social Sciences, University of Southampton.
    18. Mukerji, S., 1995. "A theory of play for games in strategic form when rationality is not common knowledge," Discussion Paper Series In Economics And Econometrics 9519, Economics Division, School of Social Sciences, University of Southampton.

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