scholarly journals European Wage Dynamics and Spillovers

2019 ◽  
Vol 2019 (156) ◽  
Author(s):  
Yuanyan Sophia Zhang
Keyword(s):  
Error Correction ◽  
Labor Productivity ◽  
Euro Area ◽  
Real Wage ◽  
Wage Growth ◽  
Nominal Wage ◽  
Inflation Expectations ◽  
Wage Dynamics ◽  
Error Correction Models ◽  
Short Run

Wage rises have remained stubbornly low in advanced Europe in recent years, but, at the same time, newer EU members are experiencing rapid wage acceleration. This paper investigates the drivers of this wage divergence. Econometric analysis using error correction models suggests that wage growth responds more quickly to changes in unemployment in the newer EU members than in advanced Europe, where wages are more closely related to inflation and inflation expectations in the short run, implying greater inertia in nominal wage rises in advanced Europe. In the years after the global crisis, this inertia contributed to the build up of a real wage overhang relative to sharply slowing labor productivity, which subsequently dragged on nominal wage rises even as unemployment began to decline. Spillovers of subdued wage growth between euro area countries also weighed on wage rises in advanced Europe.

Growth impact of CO2 emissions caused by tourist arrivals in Turkey

2016 ◽  
Vol 8 (1) ◽  
pp. 19-37 ◽  
Author(s):  
Vedat Yorucu
Keyword(s):  
Error Correction ◽  
Error Correction Models ◽  
Content Type ◽  
Foreign Tourist ◽  
Distributed Lag ◽  
Autoregressive Distributed Lag ◽  
Long Run ◽  
Short Run ◽  
Dynamic Relationships ◽  
Long Run Equilibrium

Purpose – The purpose of this study is to analyze the determinants of changes in carbon dioxide (CO2) emissions for Turkey by utilizing the autoregressive distributed lag approach to investigate the long-run equilibrium relationships of CO2 emissions between foreign tourist arrivals (FTAs) and electricity consumption (ELC). The results reveal that foreign tourists and ELC are significant determinants of a long-run equilibrium relationship with CO2 emissions from electricity and heat production and CO2 emissions from transport for Turkey, respectively. The results of the conditional error correction models (CECM) confirm that there are long-run causal relationships from the growing number of foreign tourist arrivals and the increase of ELC toward the growth of CO2 emissions during 1960-2010. The results of autoregressive distributed lag (ARDL) error correction models for CO2 emissions also validate significant dynamic relationships between CO2 emissions, ELC and tourist arrivals in the short run. Design/methodology/approach – ARDL modeling and Bounds test approach were used in this study. Findings – Rapid tourism development in Turkey has triggered CO2 emissions. The growth of CO2 emissions in Turkey threatens sustainability. The hypothesis of “The growth of CO2 emissions in Turkey” is validated. Tourist arrivals, ELC and CO2 emissions are co-integrated. CECMs confirm the growth of CO2 emissions during 1960-2010. ARDL modeling shows significant relationships between CO2 emissions and other variables. Originality/value – Results of ARDL error correction models for CO2 emissions validate the hypothesis that there are significant dynamic relationships between CO2 emissions, ELC and tourist arrivals in Turkey for the short run.

scholarly journals Dynamic Effects of U.S. Budget Deficit and Labor Productivity - Real Wage Gap On Stock Market Performance

1970 ◽  
Vol 32 (1) ◽  
pp. 55-69
Author(s):  
Matiur Rahman ◽  
Muhammad Mustafa
Keyword(s):  
Stock Market ◽  
Error Correction ◽  
Labor Productivity ◽  
Real Wage ◽  
Budget Deficit ◽  
Wage Gap ◽  
Correction Term ◽  
Dynamic Effects ◽  
Error Correction Term ◽  
Long Run

This paper investigates the dynamic effects of annual U.S budget deficit as aratio of GDP and labor productivity-real wage gap on US stock market performance.The sample period runs from 1950 through 2012. The standard cointegration methodologyis appropriately applied. All the aforementioned variables are nonstationaryin levels revealing I(1) behavior. The coefficient of the error-correction term of thevector error-correction model (VECM) has expected negative sign with statisticalsignificance confirming long-run unidirectional causality stemming from the independentvariables to the stock market return. However, the speed of adjustment towardsa long-run equilibrium is slow as reflected in the low numerical coefficientof the error-correction term. The evidences on short-run interactive feedback effectsare also very weak.

scholarly journals Unemployment, wages and collective bargaining in the European Union

2004 ◽  
Vol 10 (4) ◽  
pp. 532-551 ◽  
Author(s):  
Eckhard Hein ◽  
Thorsten Schulten
Keyword(s):  
European Union ◽  
Collective Bargaining ◽  
Real Wage ◽  
Wage Growth ◽  
Social Institutions ◽  
New Keynesian ◽  
Nominal Wage ◽  
The European Union ◽  
Wage Policy ◽  
High Unemployment

This article questions the predominant view on unemployment and wages in the European Union, according to which high unemployment is primarily caused by labour market rigidities, i.e. social institutions and regulations which prevent ‘market-clearing’ real wage levels and structures. The article shows that the foundations of that view coming either from neoclassical or New Keynesian theory are not convincing, neither theoretically nor empirically. Analysis of the developments in the EU during the last four decades shows that the claimed positive relationship between real wage growth and unemployment cannot be found. On the contrary, persistently high unemployment has had strong adverse effects on nominal wage growth and on the labour income share. Weakened union bargaining power and changing collective bargaining structures have contributed to this result. This article therefore concludes that the current EU economic and employment policies aiming at further wage restraint, wage differentiation and decentralisation of collective bargaining are deeply misguided and need to be replaced by an alternative wage policy as part of a growth- and employment-oriented coordination of macroeconomic policies.

ESTIMATION OF NONLINEAR ERROR CORRECTION MODELS

2010 ◽  
Vol 27 (2) ◽  
pp. 201-234 ◽  
Author(s):  
Myung Hwan Seo
Keyword(s):  
Least Squares ◽  
Error Correction ◽  
Convergence Rates ◽  
Estimation Error ◽  
Least Squares Estimation ◽  
Asymptotic Distributions ◽  
Smooth Transition ◽  
Threshold Cointegration ◽  
Error Correction Models ◽  
Short Run

Asymptotic theory for the estimation of nonlinear vector error correction models that exhibit regime-specific short-run dynamics is developed. In particular, regimes are determined by the error correction term, and the transition between regimes is allowed to be discontinuous, as in, e.g., threshold cointegration. Several nonregular problems are resolved. First of all, consistency—square rootnconsistency for the cointegrating vectorβ—is established for the least squares estimation of this general class of models. Second, the convergence rates are obtained for the least squares of threshold cointegration, which aren3/2andnforβandγ, respectively, whereγdenotes the threshold parameter. This fast rate forβin itself is of practical relevance because, unlike in smooth transition models, the estimation error inβdoes not affect the estimation of short-run parameters. We also derive asymptotic distributions for the smoothed least squares estimation of threshold cointegration.

scholarly journals Wage Growth after the Great Recession

2017 ◽  
pp. 1-6 ◽  
Author(s):  
Roberto Pinheiro ◽  
Meifeng Yang
Keyword(s):  
Labor Productivity ◽  
Great Recession ◽  
Wage Growth ◽  
Nominal Wage ◽  
Labor Share ◽  
The Great Recession ◽  
Expected Inflation ◽  
Show Evidence ◽  
Weak Growth ◽  
Labor's Share

Nominal wage growth since the Great Recession has been sluggish. We show that the sluggishness is due mostly to weak growth in labor productivity, as well as lower-than-expected inflation. We also find that wage growth since late 2014 has actually been above what would be consistent with realized labor-productivity growth and inflation, and this trend in wages reflects an increase in labor's share of income. We show evidence that this increase in the labor share may be due to a reversal of the trend to replace labor with capital.

scholarly journals Immigration and Wage Dynamics in Germany

2019 ◽  
Vol 19 (301) ◽  
Author(s):  
Sabine Klinger ◽  
Anvar Musayev ◽  
Jean-Marc Natal ◽  
Enzo Weber
Keyword(s):  
Unemployment Rate ◽  
Productivity Growth ◽  
Employment Growth ◽  
Wage Growth ◽  
Inflation Expectations ◽  
Wage Dynamics ◽  
Competition Effects ◽  
Micro Level ◽  
Complementarity Effects ◽  
German Data

German wages have not increased very rapidly in the last decade despite strong employment growth and a 5 percentage point decline in the unemployment rate. Our analysis shows that a large part of the decline in unemployment was structural. Micro-founded Phillips curves fit the German data rather well and suggest that relatively low wage growth can be largely attributed to low inflation expectations and low productivity growth. There is no evidence – from either aggregate or micro-level administrative data – that large immigration flows since 2012 have had dampening effects on aggregate wage growth, as complementarity effects offset composition and competition effects.

Determinants of Inflation in Vietnam: A VECM Approach

2015 ◽  
Vol 22 (04) ◽  
pp. 26-50
Author(s):  
Ngoc Tran Thi Bich ◽  
Huong Pham Hoang Cam
Keyword(s):  
Interest Rate ◽  
Crude Oil ◽  
Error Correction ◽  
Budget Deficit ◽  
Oil Prices ◽  
Crude Oil Prices ◽  
Domestic Credit ◽  
Short Run ◽  
The Impact

This paper aims to examine the main determinants of inflation in Vietnam during the period from 2002Q1 to 2013Q2. The cointegration theory and the Vector Error Correction Model (VECM) approach are used to examine the impact of domestic credit, interest rate, budget deficit, and crude oil prices on inflation in both long and short terms. The results show that while there are long-term relations among inflation and the others, such factors as oil prices, domestic credit, and interest rate, in the short run, have no impact on fluctuations of inflation. Particularly, the budget deficit itself actually has a short-run impact, but its level is fundamentally weak. The cause of the current inflation is mainly due to public's expectations of the inflation in the last period. Although the error correction, from the long-run relationship, has affected inflation in the short run, the coefficient is small and insignificant. In other words, it means that the speed of the adjustment is very low or near zero. This also implies that once the relationship among inflation, domestic credit, interest rate, budget deficit, and crude oil prices deviate from the long-term trend, it will take the economy a lot of time to return to the equilibrium state.

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