ULC Dynamics of Euro Area Countries and SR in the Long Run
In this paper we analyse the ability of national unit labor costs of euro area countries to converge to the weighted average of the EMU and in the case of SR also to the weighted average of V4 countries. Co-integration between individual and average nominal ULC indices was examined through static (OLS) and dynamic (VEC) tests and estimates. We discovered a significant co-integration under an absolute convergence of the ULC for almost all countries (incl. SR) to the equilibrium, which was determined mainly by the weighted average of the euro area. In general, a significant convergence would enable different levels of nominal ULC but not long-term differences in their development, which is an important criterion for sustaining the competitiveness of a country without an exchange rate mechanism.
|Date of creation:||Oct 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: ++421/2/5787 1111
Fax: ++421/2/6787 1100
Web page: http://www.nbs.sk/en/publications-issued-by-the-nbs/working-papers
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:svk:wpaper:1002. 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: ()
If references are entirely missing, you can add them using this form.