Competitiveness in Transition Economies

What Scope for Real Appreciation?

• Author(s): Ms.Kornelia Krajnyak, Mr.Jeronimo Zettelmeyer,
• Publisher: International Monetary Fund
• Pages: 55
• ISBN_10: 1451923554
  ISBN_13: 9781451923551
  
• Language: en
• Categories: Business & Economics / Labor / General , Business & Economics / Foreign Exchange , Business & Economics / Production & Operations Management ,

Description:... This paper estimates equilibrium dollar wages for 15 transition economies. Equilibrium dollar wages are interpreted as full employment wages consistent with a country’s physical and human capital endowment, and estimated by regressing actual dollar wages on productivity and human capital proxies in a short (1990-95) panel of 85 countries. The main results are: (i) equilibrium dollar wages have appreciated steadily in the Baltic countries and fast-reforming Central and Eastern European (CEE) transition economies, but have been flat in most CIS countries; and (ii) 1996 actual dollar wages remain below estimated equilibrium dollar wages for most but not all transition countries covered.