Chen, Yao; Ward, Felix - 2022 - This version: April 2022
regions. Upon fixing exchange rates, the region with higher structural wage inflation falls into a low-growth trap. When … calibrated to the euro area, the model implies a slowdown in the TFP growth rate of the euro area's periphery relative to its … core. An empirical analysis confirms that the periphery's higher structural wage inflation rate contributed to its lower …