Non-Accelerating Wage Inflation Rate of Unemployment in Poland

National Bank of Poland Working Paper No. 48

50 Pages Posted: 7 Oct 2008

Date Written: May 30, 2008

Abstract

The model of the wage bargaining constitutes a framework for calculation of the NAWRU in Poland. The approach used in the paper let me trace changes of the natural unemployment rate in Poland in the context of structural changes in the economy in the last decade. Moreover, I introduced the endogenous equilibrium rate into the existing macroeconomic model - ECMOD. It allowed me to simulate NAWRU behavior after economic shocks. Simulation results shed some light on channels and speed of adjustment of the modelled economy. Interestingly, when NAWRU is tied to the stock of capital, relative prices and fiscal variables, the model is able to replicate high degree of the unemployment persistence.

Keywords: equilibrium unemployment, NAWRU, macromodel, labour market

JEL Classification: E10, E17, E24, E62

Suggested Citation

Budnik, Katarzyna Barbara, Non-Accelerating Wage Inflation Rate of Unemployment in Poland (May 30, 2008). National Bank of Poland Working Paper No. 48, Available at SSRN: https://ssrn.com/abstract=1280041 or http://dx.doi.org/10.2139/ssrn.1280041

Katarzyna Barbara Budnik (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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