Price and Wage Setting in Portugal: Learning by Asking
Bank of Portugal; Technical University of Lisbon (UTL) - School of Economics and Management; Universidade Lusíada de Lisboa
April 1, 2011
ECB Working Paper No. 1314
This paper presents the main findings of a survey conducted on a sample of Portuguese firms. The main aim was to identify some relevant characteristics about the dynamics of prices and wages in Portugal. The most important conclusions are: i) changes to wages are more synchronized than changes to prices; ii) most wages are defined using inflation as a yardstick, even though there are no formal rules; iii) the wages of most workers are defined in terms of sector-related collective agreements; iv) a considerable proportion of workers receive wages above those been agreed under the collective agreement; v) firms make frequent use of other mechanisms to cut payroll costs as a way of overcoming the restrictions imposed by downward nominal wage rigidity.
Number of Pages in PDF File: 36
Keywords: survey data, wage rigidity, price rigidity, indexation, institutions
JEL Classification: D21, E30, J31working papers series
Date posted: April 6, 2011
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