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Author: Ms.Prachi Mishra Publisher: International Monetary Fund ISBN: 1451871929 Category : Business & Economics Languages : en Pages : 44
Book Description
We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981–2005, we find that the elasticity of domestic wages to real exchange rate is 0.1 after a year for countries with high barriers to external labor mobility, but about 0.4 in countries with low barriers to mobility. The results are robust to the inclusion of various controls, different measures of exchange rates, and concepts of labor market integration. These findings call for including labor mobility in macro models of external adjustment.
Author: Ms.Prachi Mishra Publisher: International Monetary Fund ISBN: 1451871929 Category : Business & Economics Languages : en Pages : 44
Book Description
We analyze how the pass-through from exchange rate to domestic wages depends on the degree of integration between domestic and foreign labor markets. Using data from 66 countries over the period 1981–2005, we find that the elasticity of domestic wages to real exchange rate is 0.1 after a year for countries with high barriers to external labor mobility, but about 0.4 in countries with low barriers to mobility. The results are robust to the inclusion of various controls, different measures of exchange rates, and concepts of labor market integration. These findings call for including labor mobility in macro models of external adjustment.
Author: Linda S. Goldberg Publisher: ISBN: Category : Economics Languages : en Pages : 44
Book Description
The effects of exchange rate fluctuations across the population is an important issue for increasingly globalized economies. Previous studies using industry aggregate data have found differences across industries in the labor market implications of exchange rates, reporting that industry wages are significantly more responsive than industry employment. We offer an explanation for this paradoxical finding. Using Current Population Survey data for 1976 through 1998, we document that the main mechanism for exchange rate effects on wages occurs through job turnover and the strong consequences this has for the wages of workers undergoing such job transitions. By contrast, workers who remain with the same employer experience little if any wage impacts from exchange rate shocks. In addition, we find that the least educated workers who also have the most frequent job changes shoulder the largest adjustments to exchange rates.
Author: Linda S. Goldberg Publisher: ISBN: Category : Foreign exchange rates Languages : en Pages : 32
Book Description
We document the consequences of real exchange rate movements for the employment, hours, and hourly earnings of workers in manufacturing industries across individual states. Exchange rates have statistically significant wage and employment implications in these local labor markets. The importance and size of these dollar-induced effects vary considerably across industries and are more pronounced in some U.S. regions. In addition to the importance of exchange rate shocks, we confirm prior research results showing that relatively strong local conditions drive up wage in local industries, while anticipated future (positive) local shocks reduce current wages
Author: Robert Miguel W. K. Kollman Publisher: International Monetary Fund ISBN: 1451928521 Category : Business & Economics Languages : en Pages : 52
Book Description
This paper studies dynamic-optimizing model of a semi-small open economy with sticky nominal prices and wages. The model exhibits exchange rate overshooting in response to money supply shocks. The predicted variability of nominal and real exchange rates is roughly consistent with that of G-7 effective exchange rates during the post-Bretton Woods era. The model predicts that a positive domestic money supply shock lowers the domestic nominal interest rate, that it raises output and that it leads to a nominal and real depreciation of the country’s currency. Increases in domestic labor productivity and in the world interest rate too are predicted to induce a nominal and real exchange rate depreciation.
Author: Deepak Lal Publisher: ISBN: Category : Foreign exchange Languages : en Pages : 68
Book Description
The standard trade-theoretic Stolper-Samuelson-Rybczynski model is used in an attempt to explain movements of real wages in the Philippines. In view of the factor intensities in the Philippines, commodities are aggregated into two composite goods, traded and non-traded. The relative price, or real exchange rate, of these goods is shown to have been an important determinant, with changes in relative factor supplies of less importance in determining real wages. A conventional two-sector model is set out, which distinguishes between the short- and long-run effects in terms of the quasi-fixity of sector specific capital. A simple regression model is estimated and seems to provide a fairly good explanation of what has hitherto appeared to be a puzzling feature of post-war Philippines economic performance: high growth rates of output and employment accompanied by declining real wages, in turn being associated with a rising incidence of poverty, in at least two periods. The final section of the paper briefly outlines the sources of the movements in the real exchange rate, leading to these real wage movements, and draws some tentative conclusions for economic policy.
Author: Mr.Eric V. Clifton Publisher: International Monetary Fund ISBN: 1451858159 Category : Business & Economics Languages : en Pages : 25
Book Description
This paper examines the role of exchange rate appreciation and the minimum wage in the relative decline of traditional sectors in Israel. It finds little evidence to indicate that real exchange rate appreciation is primarily responsible for this decline. Rather, the evidence indicates that slower productivity growth in traditional sectors has led to relatively larger increases in unit labor costs compared with high-tech sectors. Although the links are only indicative, the evidence also suggests that the minimum wage has played a role in the relatively faster growth in unit labor costs.
Author: Mr.Esteban Jadresic Publisher: International Monetary Fund ISBN: 1451843232 Category : Business & Economics Languages : en Pages : 55
Book Description
Since the mid-1970s, there has been considerable research on the macroeconomic consequences of wage indexation. Nonetheless, until recently, this research had not explicitly explored the implications of contracts that index wages to lagged inflation, the usual type of wage indexation observed in practice. Drawing mainly on recent research by the author, this paper examines the consequences of wage indexation to lagged inflation on aggregate wage formation, the cost of disinflation under money- and exchange-rate-based stabilization, the variability of output under alternative shocks and policy regimes, the choice of exchange rate regime, and the level and variability of inflation.
Author: Ms.Prachi Mishra
Author: Ms.Prachi Mishra
Author: Dag Lindskog
Author: Linda S. Goldberg
Author: Linda S. Goldberg
Author: Rodney Edvinsson
Author: Robert Miguel W. K. Kollman
Author: Jouko Vilmunen
Author: Deepak Lal
Author: Mr.Eric V. Clifton
Author: Mr.Esteban Jadresic