Aggregate Wage Flexibility in Selected New EU Member States

Ian Babetskii
Authors registered in the RePEc Author Service: Jan Babecký

No 1916, CESifo Working Paper Series from CESifo

Abstract: 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 over 1995-2004, this paper aims to assess empirically the role of aggregate wages as a correction mechanism for dealing with economic disturbances. We apply classical time series/panel, Bayesian, and cointegration techniques to determine the extent to which aggregate wages can accommodate shocks in the economy.

Keywords: ERM-II; euro adoption; labor market; wage flexibility (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Working Paper: Aggregate Wage Flexibility in Selected New EU Member States (2006)
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