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Wage Setting, Wage Curve and Phillips Curve: The Italian evidence
Author(s) -
Chiarini Bruno,
Piselli Paolo
Publication year - 1997
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/1467-9485.00074
Subject(s) - economics , phillips curve , wage , cointegration , econometrics , unemployment , flexibility (engineering) , order (exchange) , efficiency wage , empirical evidence , inflation (cosmology) , macroeconomics , labour economics , philosophy , physics , management , finance , epistemology , theoretical physics
The purpose of this paper is to investigate some issues of wage setting in order to assess if nominal inertia and wage flexibility characterise the Italian supply side, using multivariate cointegration models. Our estimates indicate that an explicit distinction between stationary and non‐stationary variables and a joint analysis of long‐run and short‐run structure is crucial for achieving clearer results. To this end, we use quarterly time series data for industry sector 1976:1–1993:4. Interesting results have been found concerning the empirical evidence of a long‐run wage curve and the existence of a Phillips curve, through adopting alternative order reduction of the I(2) wage and price variables. Moreover, some insights on regional (North‐South) unemployment effects are pointed out and discussed.