LABOR MARKET INSTITUTIONS AND MACROECONOMIC VOLATILITY IN A PANEL OF OECD COUNTRIES |
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| Authors: | Fabio Rumler Johann Scharler |
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| Affiliation: | 1. Oesterreichische Nationalbank, Economic Analysis Division, Otto‐Wagner‐Platz 3, POB 61, A‐1011 Vienna, Austria, E‐Mail: fabio.rumler@oenb.at;2. Department of Economics, University of Linz, Altenbergerstrasse 69, A‐4040 Linz, Austria, E‐Mail: johann.scharler@jku.at |
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| Abstract: | In this paper we analyze empirically how labor market institutions influence business cycle volatility in a sample of 20 OECD countries. Our results suggest that countries characterized by high union density tend to experience more volatile movements in output, whereas the degree of coordination of the wage bargaining system and the strictness of employment protection legislation appear to be only of limited importance. We also find some evidence suggesting that highly coordinated wage bargaining systems have a dampening impact on inflation volatility. |
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