Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/226142
Authors: 
Jovanovic, Branimir
Petreski, Marjan
Year of Publication: 
2012
Series/Report no.: 
wiiw Balkan Observatory Working Papers No. 104
Abstract: 
The objective of this paper is to assess how the level of unionisation and the rigidity of the exchange rate affects wages and monetary policy in South-East Europe and the Commonwealth of Independent States, with a particular focus on the recent economic crisis. Towards that end, a New Keynesian model with price and wage rigidities is used. Results suggest that fixed exchange rate and strong trade unions seem to constrain monetary policy in these countries, because monetary policy responded counter-cyclically during the crisis only in countries with weak trade unions and countries with flexbible exchange rate. Also, findings point out that trade unions may be more effective for controlling inflation in these countries than the monetary authorities.
Subjects: 
monetary policy
fixed exchange rate
wages
unionisation
SEE
CIS
crisis
JEL: 
E52
F0
J51
P20
Document Type: 
Working Paper

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