Price, wage and employment response to shocks: evidence from the WDN Survey

• Autores: Giuseppe Bertola, Aurelijus Dabusinskas, Marco Hoeberichts, Mario Izquierdo, C. Kwapil, Jeremi Montornès, Daniel Radowski
• Localización: Documentos de trabajo - Banco de España, ISSN 0213-2710, Nº 6, 2010, págs. 9-37
• Idioma: inglés
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• Dialnet Métricas: 2 Citas
• Resumen

  • This paper analyses information from survey data collected in the framework of the Eurosystem�s Wage Dynamics Network (WDN) on patterns of firm-level adjustment to shocks. We document that the relative intensity and the character of price vs. cost and wage vs. employment adjustments in response to cost-push shocks depend - in theoretically sensible ways - on the intensity of competition in firms� product markets, on the importance of collective wage bargaining and on other structural and institutional features of firms and of their environment. Focusing on the pass-through of cost shocks to prices, our results suggest that the pass-through is lower in highly competitive firms. Furthermore, a high degree of employment protection and collective wage agreements tend to make this pass through stronger.