Euro-area labour markets: Different reaction to shocks?
A small labour market model for the six largest euro-area countries (Germany, France, Italy, Spain, the Netherlands and Belgium) is estimated in a state space framework. The model entails, in the long run, four driving forces: trend labour force, trend labour productivity, long-run inflation rate...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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University of Warsaw
2014-11-01
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| Series: | Journal of Banking and Financial Economics |
| Subjects: | |
| Online Access: | https://press.wz.uw.edu.pl/cgi/viewcontent.cgi?article=1096&context=jbfe |
| _version_ | 1826903918460796928 |
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| author | Jan Bruha Beatrice Pierluigi Roberta Serafini |
| author_facet | Jan Bruha Beatrice Pierluigi Roberta Serafini |
| author_sort | Jan Bruha |
| collection | DOAJ |
| description | A small labour market model for the six largest euro-area countries (Germany, France, Italy,
Spain, the Netherlands and Belgium) is estimated in a state space framework. The model entails,
in the long run, four driving forces: trend labour force, trend labour productivity, long-run inflation
rate and trend hours worked. The short run dynamics is governed by a VAR model including six
shocks. The state-space framework is convenient for the decomposition of endogenous variables
in trends and cycles, for shock decomposition, for incorporating external judgment, and for
running conditional projections. The forecast performance of the model is rather satisfactory.
The model is used to carry out a policy experiment with the objective of investigating whether
euro-area labour markets react differently to a reduction in labour costs. Results suggest that,
following the 2008–2009 recession, moderate wage growth would significantly help delivering
a more job-intense recovery. |
| first_indexed | 2024-04-24T15:33:28Z |
| format | Article |
| id | doaj.art-c3e1da7ce8954308ae40aca194dd3cad |
| institution | Directory Open Access Journal |
| issn | 2353-6845 |
| language | English |
| last_indexed | 2025-02-17T08:04:00Z |
| publishDate | 2014-11-01 |
| publisher | University of Warsaw |
| record_format | Article |
| series | Journal of Banking and Financial Economics |
| spelling | doaj.art-c3e1da7ce8954308ae40aca194dd3cad2025-01-03T00:36:14ZengUniversity of WarsawJournal of Banking and Financial Economics2353-68452014-11-0120142(2)346010.7172/2353-6845.jbfe.2014.2.2Euro-area labour markets: Different reaction to shocks?Jan Bruha0Beatrice Pierluigi1Roberta Serafini2Czech National Bank, Czech RepublicEuropean Central Bank, GermanyEuropean Central Bank, GermanyA small labour market model for the six largest euro-area countries (Germany, France, Italy, Spain, the Netherlands and Belgium) is estimated in a state space framework. The model entails, in the long run, four driving forces: trend labour force, trend labour productivity, long-run inflation rate and trend hours worked. The short run dynamics is governed by a VAR model including six shocks. The state-space framework is convenient for the decomposition of endogenous variables in trends and cycles, for shock decomposition, for incorporating external judgment, and for running conditional projections. The forecast performance of the model is rather satisfactory. The model is used to carry out a policy experiment with the objective of investigating whether euro-area labour markets react differently to a reduction in labour costs. Results suggest that, following the 2008–2009 recession, moderate wage growth would significantly help delivering a more job-intense recovery.https://press.wz.uw.edu.pl/cgi/viewcontent.cgi?article=1096&context=jbfelabour marketforecastingkalman filter |
| spellingShingle | Jan Bruha Beatrice Pierluigi Roberta Serafini Euro-area labour markets: Different reaction to shocks? Journal of Banking and Financial Economics labour market forecasting kalman filter |
| title | Euro-area labour markets: Different reaction to shocks? |
| title_full | Euro-area labour markets: Different reaction to shocks? |
| title_fullStr | Euro-area labour markets: Different reaction to shocks? |
| title_full_unstemmed | Euro-area labour markets: Different reaction to shocks? |
| title_short | Euro-area labour markets: Different reaction to shocks? |
| title_sort | euro area labour markets different reaction to shocks |
| topic | labour market forecasting kalman filter |
| url | https://press.wz.uw.edu.pl/cgi/viewcontent.cgi?article=1096&context=jbfe |
| work_keys_str_mv | AT janbruha euroarealabourmarketsdifferentreactiontoshocks AT beatricepierluigi euroarealabourmarketsdifferentreactiontoshocks AT robertaserafini euroarealabourmarketsdifferentreactiontoshocks |