Time-varying wage Phillips curves in the euro area with a new measure for labor market slack

Bonam, Dennis; Haan, Jakob de; Limbergen, Duncan van

doi:10.1016/j.econmod.2020.12.027

Cited by 11 publications

(2 citation statements)

References 28 publications

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“…Similarly, as the previous financial crisis, the current crisis caused by the COVID-19 pandemic also has a strong impact not only on unemployment in almost every country globally and is analysed by several authors. The relationship between wage growth and the unemployment gap, known as the Phillips wage curve, is discussed by Bonam et al (2021). When comparing the estimate of the Phillips wage curve across euro area countries, wages have changed over time, but not evenly across them.…”

Section: Literature Reviewmentioning

confidence: 99%

Evaluation of the impacts of the COVID-19 pandemic on the development of the unemployment rate in Slovakia: counterfactual before-after comparison

Švábová

Tesárová

Ďurica

et al. 2021

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Research background: The COVID-19 pandemic, which hit the world in the first quarter of 2020, has impacted almost every area of people's lives. Many states have introduced varying degrees of measures to prevent its spread. Most of these measures were, or still are, aimed at reducing or completely stopping the operation of shops and services, or in some cases, also the large manufacturing companies. However, as many companies have failed to cope with these restrictions, unemployment has risen in almost all EU countries. A similar situation was also observed in Slovakia, where the mentioned measures also had a significant impact on unemployment. Purpose of the article: In this study, we deal with the quantification of the impact of a pandemic, or more precisely, anti-pandemic measures, on the development of the registered unemployment rate in Slovakia. Methods: This quantification is based on the counterfactual method of before-after comparison, which is one of the most widely used methods in the field of impact assessments and brings very accurate results, based on real data. In the analysis, we use officially published data on the unemployment rate in Slovakia during the years 2013?2020 on a monthly basis. Such a long time series, using statistical methods of its decomposition and modelling of its trend, will allow predicting the development of the unemployment rate in Slovakia, assuming a counterfactual situation of no pandemic, and compare this development with the actual situation that occurred during 2020. Findings & Value added: The study results indicate an increase in the unemployment rate in Slovakia during 2020 by 2?3% compared to the trend of its development, which would have occurred without a pandemic. Given the counterfactual method used, this difference can be described as the impact of the COVID-19 pandemic. The results of the study can be used in practice in the design and implementation of measures introduced to mitigate the impacts of the pandemic on unemployment and, in the long-term perspective, also to eliminate these effects as much as possible. It can also be used as a theoretical tool in conducting impact assessments, which have so far been carried out very rarely in Slovakia.

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Section: Literature Reviewmentioning

confidence: 99%

Evaluation of the impacts of the COVID-19 pandemic on the development of the unemployment rate in Slovakia: counterfactual before-after comparison

Švábová

Tesárová

Ďurica

et al. 2021

View full text Add to dashboard Cite

show abstract

“…The methodology is similar to the one employed in Bonam et al (2018); the parameters of the wage Phillips curve, but also the log volatility of the residuals are assumed to follow a random walk, as in Primiceri (2005). Next, a Markov-switching model is applied to test more directly for state dependency in the Phillips curve slope.…”

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confidence: 99%