Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246179 
Year of Publication: 
2021
Series/Report no.: 
ECB Working Paper No. 2602
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
Abstract: 
We quantify the effects of wage bargaining shocks on macroeconomic aggregates using a structural vector auto-regression model for Germany. We identify exogenous variation in bargaining power from episodes of minimum wage introduction and industrial disputes. This narrative information disciplines the impulse responses to a wage bargaining shock of unemployment and output, and sharpens inference on the behaviour of other variables. The implied transmission mechanism is in line with the theoretical predictions of a large class of search and matching models. We also find that wage bargaining shocks explain a sizeable share of aggregate uctuations in unemployment and in ation, that their pass-through to prices is very close to being full, and that they imply plausible dynamics for the vacancy rate, firms' profits, and the labour share.
Subjects: 
Wage bargaining
minimum wage
industrial action
narrative restrictions
structural vector autoregression
JEL: 
J2
J3
E32
C32
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-4855-5
Document Type: 
Working Paper

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