6533b854fe1ef96bd12afbe4
RESEARCH PRODUCT
Labour Market Institutions and Inflation Differentials in the EU
Riccardo RovelliRiccardo RovelliGaetano D'adamosubject
InflationLabour economicsExchange rateGoods and servicesmedia_common.quotation_subjectUnemploymentWageEconomicsReal interest rateEu countriesPhillips curvemedia_commondescription
Adopting a simple Phillips curve framework, we show that different labour market institutions across EU countries are associated with significant differences in the response of inflation to unemployment and exchange rate shocks. More wage coordination and higher union density flatten the Phillips curve and increase the inflation response to the real exchange rate, i.e. the exchange rate pass-through. In addition, using a new approach to the classification of goods and services as "traded" or "non-traded", we show that both these institutional effects are significantly stronger for the more exposed (traded) sector.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2015-01-01 | SSRN Electronic Journal |