Wage Contracts and Stabilization Policies in Semi-Industrialized Economies

Steven Ambler () and Nasri Harb ()
Additional contact information
Nasri Harb: Center for Research on Economic Fluctuations and Employment, UQAM

No 93, Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal

Abstract: We build a dynamic, general equilibrium model of a small, open, semi-industrialized country with overlapping wage contracts, wage indexation, and indexation lags. We calibrate and simulate the model in order to assess the role of wage contracts in explaining the features of recent real-world stabilization programs. We show that a policy package with a significant reduction of public sector deficits can reproduce qualitatively most of the observed comovements among macroeconomic aggregates. However, the responses of the model's endogenous variables to the implementation of the stabilization program are not as pronounced as in the data.

Nous élaborons un modèle dynamique d'une petite économie ouverte et semi-industrialisée. Dans cette économie, il y a des contrats de salaire imbriqués qui peuvent être indexés au niveau des prix, et où l'indexation peut être sujette à des retards. Nous étalonnons et simulons le modèle afin d'expliquer les caractéristiques principales de certains programmes de stabilisation récents. Nous montrons qu'un programme avec des réductions substantielles des dépenses publiques engendre des comouvements qui sont qualitativement compatibles avec les données. Par contre, la taille des réponses des agrégats au programme de stabilisation est généralement inférieure à ce qu'on observe dans les données.

Keywords: Exchange Rate Based Stabilization Programs; Developing Economies (search for similar items in EconPapers)
JEL-codes: E52 E65 O23 (search for similar items in EconPapers)
Pages: 41 pages
Date: 1999-10
New Economics Papers: this item is included in nep-dge, nep-lab and nep-pub
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.unites.uqam.ca/eco/CREFE/cahiers/cah93.ps Main text (application/postscript)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://www.unites.uqam.ca/eco/CREFE/cahiers/cah93.ps [301 Moved Permanently]--> https://unites.uqam.ca/eco/CREFE/cahiers/cah93.ps)
http://www.unites.uqam.ca/eco/CREFE/cahiers/cah93.pdf Main text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://www.unites.uqam.ca/eco/CREFE/cahiers/cah93.pdf [301 Moved Permanently]--> https://unites.uqam.ca/eco/CREFE/cahiers/cah93.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:cre:crefwp:93

Access Statistics for this paper

More papers in Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal P.O. Box 8888, Downtown Station, Montreal (Canada) Quebec, H3C 3P8. Contact information at EDIRC.
Bibliographic data for series maintained by Stéphane Pallage ().