Inflation Adjustment and Labour Market Structures: Evidence from a Multi-Country Study
27 Pages Posted: 8 Mar 2005
Date Written: March 2005
Abstract
An empirical analysis of the impact of labour market structures on the response of inflation to macroeconomic shocks is presented. Results based on a 20 country panel show that if labour market coordination is high, the effect on inflation of movements in unemployment, import prices, tax rates and productivity is dampened, both on impact and dynamically. In contrast, monopoly power in labour supply, measured by the percentage unionisation of the workforce, appears to amplify the response of inflation to its reduced form determinants. These findings are attributed to the behaviour of wages following movements in demand- and supply-side conditions.
Keywords: inflation, input price shocks, labour market coordination, trade union density
JEL Classification: E31, J51
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Unemployment, Growth and Taxation in Industrial Countries
By Francesco Daveri and Guido Tabellini
-
By Jan C. Van Ours and Michèle Belot
-
Policy Complementarities: The Case for Fundamental Labor Market Reform
By David T. Coe
-
Labor Market Institutions and Demographic Employment Patterns
By Giuseppe Bertola, Francine D. Blau, ...
-
Labour Market Institutions and Demographic Employment Patterns
By Giuseppe Bertola, Francine D. Blau, ...
-
By Giuseppe Bertola, Francine D. Blau, ...
-
By Giuseppe Bertola, Francine D. Blau, ...
-
Taxation and the Structure of Labor Markets: The Case of Corporatism
By Lawrence H. Summers, Jonathan Gruber, ...