William Davidson Institute Working Paper 487
1.1
1.0
0.9
0.8
0.7
0.6
Figure 7. Dynamics of the relative wage index

1998
1999
2000
2001
relative wage index ------trend
The reason for the observed relative wage dynamics lies to some extent in the still
segmented labor market, which results in of high real wage rigidity in Bulgaria.
Significant support to that consideration we find in the elasticity (econometrically
estimated) of the non-tradable wage growth rate in response to changes in the tradable
wage level. According to our estimations, the elasticity is under 1, i.e. 0.48, which
implies that when salaries in the tradable sector increase by 10%, salaries in non-tradable
sector rise only by 4.8%, and that there are other factors apart from labor productivity
that determine nominal wage setting in the services sector.
In spite of the above-discussed contradicting initial assumptions, the following
figure definitely shows the higher price dynamics in the non-tradable sector (PNT > PT).
21
More intriguing information
1. The name is absent2. NATURAL RESOURCE SUPPLY CONSTRAINTS AND REGIONAL ECONOMIC ANALYSIS: A COMPUTABLE GENERAL EQUILIBRIUM APPROACH
3. On the estimation of hospital cost: the approach
4. The name is absent
5. The name is absent
6. Delivering job search services in rural labour markets: the role of ICT
7. AMINO ACIDS SEQUENCE ANALYSIS ON COLLAGEN
8. Implementation of the Ordinal Shapley Value for a three-agent economy
9. Estimated Open Economy New Keynesian Phillips Curves for the G7
10. Yield curve analysis