This article analyses wage flexibility as a factor in the unemployment rate across 12 Euro Area countries. We use extensive evidence pertaining to the countercyclical behaviour of the labour income share ratio to estimate its equilibrium value in the long run. This measure is calculated using a...

This study estimates a quadratic sectoral wage equation for the member countries of the enlarged EU where wages are a function of each country's geographical location with respect to market size (new trade/New Economic Geography (NEG) effect), human capital (HOS endowment effect), and...