Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171191
Authors: 
Faia, Ester
Year of Publication: 
2017
Citation: 
[Journal:] IZA World of Labor [ISSN:] 2054-9571 [Year:] 2017 [Issue:] 383
Abstract: 
In the presence of rigid prices, movements in the exchange rate help to absorb external shocks and to reduce changes in net exports. However, they also affect firms’ competitiveness, marginal costs, and labor demand. In countries where labor market institutions hinder wage adjustment (for example due to high union density or more rigid collective bargaining agreements), firms are less competitive: labor demand is then more sensitive to external shocks, increasing the risk of unemployment.
Subjects: 
competitiveness
wage adjustment
labor market institutions
real exchange rate
monetary policy
JEL: 
J3
F66
Persistent Identifier of the first edition: 
Document Type: 
Article

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