This Selected Issues paper for euro area policies analyzes the product market regulation and benefits of wage moderation. The paper identifies structural shifts in the relationship between wages and unemployment rates—a “wage curveâ€â€”in 20 industrial countries. It reviews...

Using household level data for France from 1990 to 2000, we estimate a relationship between wages and unemployment taking into account compositional, time and regional effects. We show that this relationship shifted outward during the 1990s most likely because of a structural change in workers'...

This paper analyzes wage- and price-setting relations in new EU member countries. Panel estimates indicate a strong and significant relationship between real wages and labor productivity, as well as evidence of wage pass-through to inflation. Terms of trade shocks do not feed through to real...

This paper addresses two questions. First, under what circumstances will a centralized wage-bargaining system offer higher output and employment than a decentralized system? Second, what is the relationship between the degree of wage centralization and inflation? The paper argues that...

This Selected Issues paper and Statistical Appendix analyzes labor market institutions and reforms for Cyprus. The paper describes the legal and institutional framework of the Cypriot labor market, and discusses the voluntary framework for negotiations, the degree of unionization and the system...

The literature on the relationship between the unemployment rate and wage bargaining fails to separate the offsetting effects of a reduction in competition associated with centralized bargaining and the increased awareness of unemployment externalities. This paper uses OECD data to distinguish...

The main focus of the “wage bargaining” literature has been on the factors promoting real wage flexibility at the macro level. This paper, in contrast, examines the microeconomic issues of wage bargaining. More specifically, this paper appraises the following questions: (a) what are the...

During the course of development, wages and labor productivity are much higher in the nonfarm sectors of the economy than in agriculture. In this paper, we examine the sources and consequences of wage and productivity gaps in the U.S. from 1800 to 2000. We build a quantitative general...

In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective, this paper presents an econometric analysis of the influence of labor market flows on wage formation as an alternative to the...

The corporate governance problem of state enterprises in former socialist economies can give rise to excessive wage claims and/or capital decumulation. This paper focuses on these problems, highlighting the dynamic links between wage behavior, the fiscal deficit, inflation and the capital stock....