Documents Momferatou, Daphné 4 results

"The box provides an analysis of the recent increase in inflation differentials in the euro area countries and its impact on price competitiveness. To a certain extent, inflation differentials are normal in a currency union, insofar as they reflect temporary adjustments to shocks or are associated with catching-up processes. However, in other cases, inflation differentials may reflect persistent diverging cost developments, possibly related to a spillover of energy and/or food price shocks into labour cost differentials, or structural challenges such as nominal and real rigidities in product and labour markets. In such cases, inflation differentials may cause significant shifts in price competitiveness that need to be addressed by structural policies and/or countercyclical fiscal policy. Several euro area countries with legacy external imbalances have improved their price competitiveness in recent years when compared with the pre-pandemic period, while others have recorded considerable losses in price competitiveness."

"This paper presents information on wage bargaining institutions, collected using a standardised questionnaire. Our data provide information from 1995 and 2006, for four sectors of activity and the aggregate economy, considering 23 European countries, plus the US and Japan. Main findings include a high degree of regulation in wage setting in most countries. Although union membership is low in many countries, union coverage is high and almost all countries also have some form of national minimum wage. Most countries negotiate wages on several levels, the sectoral level still being the most dominant, with an increasingly important role for bargaining at the firm level. The average length of collective bargaining agreements is found to lie between one and three years. Most agreements are strongly driven by developments in prices and eleven countries have some form of indexation mechanism which affects wages. Cluster analysis identifies three country groupings of wage-setting institutions."