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Title:Inflation Adjustment and Labour Market Structures : Evidence from a Multi-Country Study PDF Logo
Authors:Nunziata, Luca
Bowdler, Christopher
Issue Date:2005
Series/Report no.:IZA Discussion paper series 1510
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.
Subjects:inflation
input price shocks
labour market coordination
trade union density
JEL:J51
E31
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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