Josheski, Dushko and Bardarova, Snezana (2014) Causal relationship between wages and prices in R. Macedonia: VECM analysis. Horizonti, 12. pp. 127-147. ISSN 1857-856X
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Abstract
This paper presents the testing of the issue of causality between wages and prices in R. Macedonia. OLS relationship between prices and wages is positive; productivity is not significant in determination of prices or wages as well. The standard procedure is used in this paper, such as first OLS estimates, co-integration test in order to determine whether there long run relationship existing between wages and prices and the Vector error correction model has been applied. There is only one co-integration relationship existing according to the co-integration tests. Causation runs from wages to prices, and wages significantly enter in the co-integration relation. As from the OLS estimation results the productivity does not enter statistically significant in the wage neither in the price equation. As a recommendation to the policy makers is to incorporate productivity (standard of living) in the legal acts for establishment of minimal wage. This may be accomplished by regulating the internal wage structures, mandated minimum wages, etc.
| Item Type: | Article |
|---|---|
| Subjects: | Social Sciences > Economics and business |
| Divisions: | Faculty of Tourism and Business Logistics |
| Depositing User: | Dusko Josevski |
| Date Deposited: | 20 May 2014 12:37 |
| Last Modified: | 20 May 2014 12:37 |
| URI: | https://eprints.ugd.edu.mk/id/eprint/9971 |
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