ULC Dynamics of Euro Area Countries and SR in the Long Run

Sandra Tatierska ()
Additional contact information
Sandra Tatierska: Research Department, National Bank of Slovakia

No WP 6/2008, Working and Discussion Papers from Research Department, National Bank of Slovakia

Abstract: 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.

Keywords: ULC; competitiveness; convergence; co-integration; VEC (search for similar items in EconPapers)
JEL-codes: C22 F15 J30 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2008-10
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nbs.sk/_img/Documents/PUBLIK/WP_6-2008.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:svk:wpaper:1002

Access Statistics for this paper

More papers in Working and Discussion Papers from Research Department, National Bank of Slovakia Contact information at EDIRC.
Bibliographic data for series maintained by ().