Wage-Price Setting in New EU Member States

October 1, 2008

Preview Citation

Format: Chicago

Manuela Goretti. Wage-Price Setting in New EU Member States, (USA: International Monetary Fund, 2008) accessed October 6, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper analyzes wage- and price-setting relations in new EU member countries. Panel estimates indicate a strong and significant relationship between real wages and labor productivity, as well as evidence of wage pass-through to inflation. Terms of trade shocks do not feed through to real wages. Country-specific wage developments, beyond differences in labor productivity growth, are mostly explained by real wage catch-up from different initial levels and different labor market conditions. Qualitative evidence also suggests that public sector wage demonstration effects and institutional factors may play a role in wage determination.

Subject: Labor costs, Labor markets, Labor productivity, Real wages, Wages

Keywords: Catch-up effect, Pay, Real wage, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/243
Stock No:

WPIEA2008243
ISBN:

9781451871012
ISSN:

1018-5941

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