Artus, J. and M. Knight, 1984, Issues in the assessment of the exchange rates of industrial countries, IMF Occasional Paper No. 29 (July) (Washington: International Monetary Fund).
Bleaney, M, 1996, “Central Bank Independence, Wage-bargaining structure, and macroeconomic performance in OECD countries,” Oxford Economic Papers, 48 pp. 20–38.
Bowitz, E. and A. Cappelen, 1997, Incomes Policies and the Norwegian Economy 1973–93, Discussion Paper No. 192, Statistics Norway.
Calmfors, L. and J. Driffill, 1998, “Bargaining structure, corporatism and macroeconomic performance,” Economic Policy, pp. 14–47.
Evjen, S. and Nymoen. R, 1997, Has the Solidarity Alternative Contributed to Lower Wage Growth in the Manufacturing Sector? Norges Bank Working Paper No. 2, (Oslo).
Marsh, I. and S. Tokarick, 1994, “Competitiveness Indicators: a Theoretical and Empirical Assessment,” IMF Working Paper No. 94/29 (Washington: International Monetary Fund).
McGuirk, A, 1986, “Measuring price competitiveness for industrial country trade in manufactures” IMF Working Paper No. 86/34 (Washington: International Monetary Fund).
Wickham, P, 1993, “A Cautionary Note on the Use of Exchange Rate Indicators,” IMF Paper on Policy Analysis and Assessment 93/5 (Washington: International Monetary Fund).
Prepared by Alun Thomas.
One way of addressing this problem is to set premiums in such a way that those industries which press for high wage bargains are forced to pay for the resulting increase in benefits.
LO is politically affiliated with the social democratic party, Labor, and is a major financial contributor to the party. In return, every Labor government contains ministers who come from the leadership of LO.
Any major dispute between the LO and NAF legally has to be referred to wage councils. This has occurred nine times since the second world war.
In early 1997, Statistics Norway made major revisions to its series to comply with the 1993 System of National Accounts. As a result, consistent series are only available as far back as 1978.
The other components of the framework include maintaining the exchange rate of the krone stable against European currencies and using fiscal policy to moderate cyclical imbalances in the economy.
Stølen (1995), using a standard econometric formulation for wage behavior, also finds a very poor explanatory fit for wage developments in the construction sector.
The communication sector has only become competitive since the late 1980s and therefore referring to it as an exposed sector over the whole period is debatable. However, the lack of degrees of freedom preclude splitting the sample into two sub-periods.
The inconclusive stationarity tests partly reflect the limited degrees of freedom.
This was the so-called EFO model in Sweden in which wage increases in the sector open to foreign trade was determined by the sum of international price inflation and the rate of growth of productivity, A similar objective is embodied in the incomes policy of Norway’s Solidarity Alternative.
It is possible that over a longer time horizon the importance of the cointegrating relationship would be more evident.
The variable is defined as the ratio of the indexes of Norwegian manufactures exports and the export market.
The estimated equations differ depending on which real exchange rate is used.
Tests were also conducted on the presence of cointegrating relationships and indicated that these relationships were present when the CPI and relative wage exchange rates were used. However, because of the limited degrees of freedom, neither estimate was significant when represented as an error correction term in each separate regression.