A new model for wage formation in Iceland
Iceland is recovering after a severe crisis, which is an impressive turnaround by any standard. However, the improvement of the economy has led to a rising wage growth, which, if it continues, may lead to another boom-bust cycle. Persistent high wage growth is likely to induce the central bank to ra...
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Oslo: University of Oslo, Department of Economics
2019
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fttriple:oai:gotriple.eu:oai:econstor.eu:10419/202632 2023-05-15T16:46:40+02:00 A new model for wage formation in Iceland Holden, Steinar 2019-01-01 http://hdl.handle.net/10419/202632 en eng Oslo: University of Oslo, Department of Economics gbv-ppn:166242387X http://hdl.handle.net/10419/202632 other ddc:330 J5 Collective bargaining wage leadership model eco manag Journal Article https://vocabularies.coar-repositories.org/resource_types/c_6501/ 2019 fttriple 2023-01-22T18:59:16Z Iceland is recovering after a severe crisis, which is an impressive turnaround by any standard. However, the improvement of the economy has led to a rising wage growth, which, if it continues, may lead to another boom-bust cycle. Persistent high wage growth is likely to induce the central bank to raise the interest rate, so as to prevent inflation from exceeding the inflation target. A combination of high wage growth and a monetary tightening would likely lead to appreciation of the Icelandic krona, which would weaken the competitive position of Icelandic firms. To ensure that wage growth is reduced down to sustainable levels, Iceland would benefit from adopting a wage leadership model, also referred to as a pattern bargaining model, like the Norwegian "frontfag-model". Establishing a wage leadership model requires three steps. - Develop a common understanding among the labour market parties about the challenges and the need for sustainable wage growth - Establish a wage leader which negotiates first and thus sets the norm for the wage growth in other parts of the labour market. - Ensure that the norm for the wage growth is followed elsewhere in the labour market. Article in Journal/Newspaper Iceland Unknown Krona ENVELOPE(12.432,12.432,65.827,65.827) |
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ddc:330 J5 Collective bargaining wage leadership model eco manag Holden, Steinar A new model for wage formation in Iceland |
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ddc:330 J5 Collective bargaining wage leadership model eco manag |
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Iceland is recovering after a severe crisis, which is an impressive turnaround by any standard. However, the improvement of the economy has led to a rising wage growth, which, if it continues, may lead to another boom-bust cycle. Persistent high wage growth is likely to induce the central bank to raise the interest rate, so as to prevent inflation from exceeding the inflation target. A combination of high wage growth and a monetary tightening would likely lead to appreciation of the Icelandic krona, which would weaken the competitive position of Icelandic firms. To ensure that wage growth is reduced down to sustainable levels, Iceland would benefit from adopting a wage leadership model, also referred to as a pattern bargaining model, like the Norwegian "frontfag-model". Establishing a wage leadership model requires three steps. - Develop a common understanding among the labour market parties about the challenges and the need for sustainable wage growth - Establish a wage leader which negotiates first and thus sets the norm for the wage growth in other parts of the labour market. - Ensure that the norm for the wage growth is followed elsewhere in the labour market. |
format |
Article in Journal/Newspaper |
author |
Holden, Steinar |
author_facet |
Holden, Steinar |
author_sort |
Holden, Steinar |
title |
A new model for wage formation in Iceland |
title_short |
A new model for wage formation in Iceland |
title_full |
A new model for wage formation in Iceland |
title_fullStr |
A new model for wage formation in Iceland |
title_full_unstemmed |
A new model for wage formation in Iceland |
title_sort |
new model for wage formation in iceland |
publisher |
Oslo: University of Oslo, Department of Economics |
publishDate |
2019 |
url |
http://hdl.handle.net/10419/202632 |
long_lat |
ENVELOPE(12.432,12.432,65.827,65.827) |
geographic |
Krona |
geographic_facet |
Krona |
genre |
Iceland |
genre_facet |
Iceland |
op_relation |
gbv-ppn:166242387X http://hdl.handle.net/10419/202632 |
op_rights |
other |
_version_ |
1766036777378775040 |