Economics, Econometrics and Finance
8 years ago

Macedonia's Firms Adjust Costs and Prices Amid Adverse Shocks.

RePEc: Research Papers in Economics
Wage and Price Setting in Macedonia: Evidence from Survey Data
Gani Ramadani, Nikola Naumovski

Paper Summary

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The survey on wage and price formation in Macedonia found that wages stay the same longer than prices. Tenure, not inflation, is the main reason for wage changes. Wage and price changes happen less often in Macedonia compared to EU countries due to low automatic wage indexation and high price competition. Downward wage rigidity is high, especially with permanent contracts. Inflation doesn't drive wage changes much. When faced with challenges, firms adjust costs and prices rather than margins and output.