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Identification and Estimation of a Labour Market Model for the Tradeables Sector: the Greek Case

Author

Listed:
  • Milas, C.

    (Department of Economics, University of Warwick)

  • Otero, J.

    (Department of Economics, University of Warwick)

Abstract

This paper derives a theoretical labour market model for the tradeables sector of a small open economy. Using Greek manufacturing data and applying multivariate cointegrating techniques, two cointegrating vectors are estimated based on the a priori restrictions provided by the theoretical model; a labour demand and a real exchange rate equation, respectively. The short-run estimates of the model suggest that labour decisions not only depend upon past disequilibria in the labour market, but also on the discrepancy between the real exchange rate and its implied long-run equilibrium relationship, that is, the magnitude of the real exchange rate misalignment.

Suggested Citation

  • Milas, C. & Otero, J., 1999. "Identification and Estimation of a Labour Market Model for the Tradeables Sector: the Greek Case," The Warwick Economics Research Paper Series (TWERPS) 528, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:528
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    References listed on IDEAS

    as
    1. Milas, Costas, 1999. "Labor Market Decisions and Greek Manufacturing Competitiveness," Journal of Policy Modeling, Elsevier, vol. 21(4), pages 505-513, July.
    2. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173, December.
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    6. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    7. Katseli, Louka Tarsitsa, 1990. "Structural Adjustment of the Greek Economy," CEPR Discussion Papers 374, C.E.P.R. Discussion Papers.
    8. Bean, Charles R, 1994. "European Unemployment: A Survey," Journal of Economic Literature, American Economic Association, vol. 32(2), pages 573-619, June.
    9. Neil R. Ericsson & David F. Hendry & Hong-Anh Tran, 1993. "Cointegration, seasonality, encompassing, and the demand for money in the United Kingdom," International Finance Discussion Papers 457, Board of Governors of the Federal Reserve System (U.S.).
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    More about this item

    Keywords

    EMPLOYMENT ; REGRESSION ANALYSIS ; ECONOMIC MODELS ; EUROPE;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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