Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/51280
Authors: 
Behr, Andreas
Pötter, Ulrich
Year of Publication: 
2005
Series/Report no.: 
Beiträge zur angewandten Wirtschaftsforschung 14
Abstract: 
We suggest a new parametric approach to estimate the extent of downward nominal wage rigidity in ten European countries between 1994 and 2001. The data base used throughout is the User Data Base (UDB) of the European Community Household Panel (ECHP). The proposed approach is based on the very flexible generalized hyperbolic distribution which allows to model wage change distributions characterized by thick tales, skewness and leptokurtosis. Significant downward nominal wage rigidity is found in all countries under analysis, but the extent varies considerably across countries. Yearly estimates reveal increasing rigidity in Italy, Greece and Portugal, while rigidity is declining in Denmark and Belgium. The results imply that the costs of price stability differ substantially across Europe.
JEL: 
E24
J30
C51
Document Type: 
Working Paper

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