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Exchange Rate Volatility Effects on the German Labour Market: A Survey of Recent Results and Extensions

Author

Listed:
  • Buscher, Herbert

    (IWH Halle)

  • Mueller, Claudia

    (affiliation not available)

Abstract

In this paper, a survey on theoretically expected and empirically proved impacts of exchange rate volatility is given. With regard to the West German unemployment, the effects of volatility are empirically analyzed using three different volatility measures and four country groups. In autoregressive models, a significant disturbing impact of volatility can be found with annual data as well as with monthly data for the whole period. While this impact does not differ for the three volatility measures, it is, however, less strong when using the monthly data. Differentiating for different subperiods by use of the monthly data, the reported impact is stronger for relatively stable periods and country groups. When isolating the cyclical component of the unemployment rate, it can be demonstrated that the whole reported impact solely affects this component. In a dynamic Okun-type relation, an additional significant impact of volatility, however, cannot be proved for all subperiods.

Suggested Citation

  • Buscher, Herbert & Mueller, Claudia, 1999. "Exchange Rate Volatility Effects on the German Labour Market: A Survey of Recent Results and Extensions," IZA Discussion Papers 37, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp37
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    References listed on IDEAS

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    Cited by:

    1. Patrick A. Puhani, 2001. "Labour Mobility: An Adjustment Mechanism in Euroland? Empirical Evidence for Western Germany, France and Italy," German Economic Review, Verein für Socialpolitik, vol. 2(2), pages 127-140, May.
    2. Franz, Wolfgang, 1999. "Real and monetary challenges to wage policy in Germany at the turn of the millennium: technical progress, globalization and European Monetary Union," ZEW Discussion Papers 99-48, ZEW - Leibniz Centre for European Economic Research.
    3. Ansgar Belke & Ralph Setzer, 2004. "Contagion, herding and exchange-rate instability — A survey," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 39(4), pages 222-228, July.
    4. Ulrich Kaiser & Claudia Stirböck, 1999. "The impact of the introduction of the Euro on firms' expectations," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 34(3), pages 107-115, May.
    5. Puhani, Patrick A., 1999. "Labour Mobility - An Adjustment Mechanism in Euroland?," IZA Discussion Papers 34, Institute of Labor Economics (IZA).
    6. Müller, Claudia & Buscher, Herbert S., 1999. "The impact of monetary instruments on shock absorption in EU-Countries," ZEW Discussion Papers 99-15, ZEW - Leibniz Centre for European Economic Research.
    7. Ansgar Belke & Daniel Gros, 2001. "Real Impacts of Intra-European Exchange Rate Variability: A Case for EMU?," Open Economies Review, Springer, vol. 12(3), pages 231-264, July.
    8. PERUGINI, Cristiano, 2009. "Employment Intensity Of Growth In Italy. A Note Using Regional Data," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 9(1).
    9. Döpke, Jörg, 2001. "The "Employment Intensity" of Growth in Europe," Kiel Working Papers 1021, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    European Monetary Union; exchange rate volatility; Okun's law; West German labour market;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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