Inflation can grease the wheels of the labor market by relaxing downward wage rigidity but it can also increase uncertainty and have a negative sand effect. This paper studies the grease effect of inflation by looking at whether the interaction between inflation and labor market regulations...

The Research Department of the IDB (RES) performs innovative, comparative research on the development issues of greatest concern to the region today. It generates a wide variety of products based on this research and disseminates them to three principal audiences: the Bank, policymakers and the...