Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/124901
Authors: 
D'Adamo, Gaetano
Rovelli, Riccardo
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 9389
Abstract: 
Adopting a simple Phillips curve framework, we show that different labour market institutions across EU countries are associated with significant differences in the response of inflation to unemployment and exchange rate shocks. More wage coordination and higher union density flatten the Phillips curve and increase the inflation response to the real exchange rate, i.e. the exchange rate pass-through. In addition, using a new approach to the classification of goods and services as "traded" or "non-traded", we show that both these institutional effects are significantly stronger for the more exposed (traded) sector.
Subjects: 
sectoral inflation differentials
inflation determinants
labour market institutions
EU 27
JEL: 
E31
J50
J60
Document Type: 
Working Paper

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