Competitiveness in Transition Economies: What Scope for Real Appreciation?

55 Pages Posted: 15 Feb 2006

See all articles by Kornélia Krajnyák

Kornélia Krajnyák

International Monetary Fund (IMF)

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics; CEPR

Date Written: November 1997

Abstract

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.

JEL Classification: F14, F21, F41, P20, P50

Suggested Citation

Krajnyak, Kornelia and Zettelmeyer, Jeromin, Competitiveness in Transition Economies: What Scope for Real Appreciation? (November 1997). IMF Working Paper, Vol. , pp. 1-55, 1997. Available at SSRN: https://ssrn.com/abstract=882722

Kornelia Krajnyak (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

CEPR ( email )

London
United Kingdom

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