Current Accounts and Coordination of Wage Bargaining
Nieminen, M., Heimonen, K., & Tohmo, T. (2019). Current Accounts and Coordination of Wage Bargaining. Open Economies Review, 30(2), 319-341. https://doi.org/10.1007/s11079-018-9511-2
Published inOpen Economies Review
© Springer Science+Business Media, LLC, part of Springer Nature 2018
This study provides novel evidence on the impact of labor market institutions on current account dynamics. Our results suggest that a high degree of coordination of wage bargaining has a positive effect on the current account balance over the long run. This result is not driven entirely by wage moderation induced by centralized wage setting. We also provide robust evidence that a high degree of coordination of wage bargaining is associated with a slower current account adjustment toward its long-run equilibrium. This result seems theoretically plausible; the aggregate shocks in the exporting sector are largely driven by idiosyncratic shocks and the presence of idiosyncratic shocks increases the importance of labor market flexibility. Overall, our analysis of the impact of labor market institutions on current account dynamics complements the existing empirical current account literature focused on macroeconomic and financial measures.
PublisherSpringer New York LLC
Publication in research information system
MetadataShow full item record
- Kauppakorkeakoulu 
Showing items with similar title or keywords.
Nieminen, Mika (University of Jyväskylä, 2017)Global current account imbalances and intra-euro area imbalances have been at the forefront of academic and policy debates for the last ten years. This thesis examines the determinants of current account balances and ...
Nieminen, Mika (2011)
Nieminen, Mika; Heimonen, Kari; Mangeloja, Esa (Routledge, 2015)This article contributes to the literature of current account balances by introducing cultural variables that until now have been omitted. The World Values Survey indicates that the Roman Catholics do not consider thrift ...
Agency of labour in a flexible pan-European labour market : a qualitative study of migrant practices and trade union strategies in the Netherlands Berntsen, Lisa E. (University of Jyväskylä, 2015)Regulatory frameworks on intra-EU mobility and flexible cross-border employment relations have stimulated competition on labour costs by recruiting migrants via cheaper labour market regimes. While it allows firms to ...
The power of the economic outlook : An ideational explanation of the distinct pattern of Finnish wage setting within the Nordic context Kaitila, Joel; Sorsa, Ville-Pekka; Alaja, Antti (SAGE Publications, 2022)Industrial relations scholars are paying increasing attention to the role of ideas in explaining shifts in bargaining systems and wage policies. This article contributes to this growing body of literature by conducting a ...