Investigating Differences between the Czech and Slovak Labour Market Using a Small Search and Matching DSGE model
|Original title:||Investigating Differences between the Czech and Slovak Labour Market Using a Small Search and Matching DSGE model|
|Keywords:||search and matching model; DSGE model; wage bargaining; Bayesian estimation|
This contribution reveals some structural differences of the Czech and Slovak labour markets in the last twelve years. A small search and matching model incorporated into standard macroeconomic dynamic stochastic general equilibrium model is estimated using Bayesian techniques. The results show that search and matching aspect provides satisfactory description of employment flows in both economies. Model estimates provide an interesting evidence that wage bargaining process is determined mainly by the power of the firms which is in accordance with the results for the U.S. labour market.