Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/57756
Authors: 
Hoffmann, Mathias
Year of Publication: 
2005
Series/Report no.: 
CFR Working Paper 05-04
Abstract: 
This paper analyses the interconnectedness between developing countries' domestic wage levels and their exchange rate choices. The theoretical model illustrates that differences in domestic wage levels are related to countries' exchange rate regimes. In particular, the level of domestic wages increases with the rigidity of the exchange rate regime. The empirical model explores the determinants of the domestic wage level in a cross-section of 38 developing countries. In line with the theoretical model, the economies under review experience a rise in the domestic wage level with an increase in the rigidity of their exchange rate regime.
Subjects: 
Exchange Rate Regimes
Factor Prices
Monetary Policy
Uncertainty
JEL: 
F33
F41
Document Type: 
Working Paper

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