Republic of Estonia: Selected Issues

May 24, 2018

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Format: Chicago

Republic of Estonia: Selected Issues, (USA: International Monetary Fund, 2018) accessed November 15, 2024

Summary

This Selected Issues paper analyzes the drivers of wage growth and inflation in Estonia. The analysis reveals that the role played by the inflation and inflation expectations in Estonia is different from those of the EU15. The impact of inflation on wage formation is smaller than in larger and richer countries with lower inflation volatility. This has limited the downward pressure on wages during the period of very low inflation in 2014–16. Although there has been an episode of wage growth leading inflation before the global financial crisis, the current simultaneous acceleration in prices and wages is not evidence of a developing wage-price spiral, as a significant share of the increase in inflation is owing to exogenous factors.

Subject: Budget planning and preparation, Education, Expenditure, Labor, Labor markets, Public financial management (PFM), Public investment spending, Wages

Keywords: Baltics, Budget planning and preparation, CR, EU average, Europe, Gender pay gap, IMF staff calculation, ISCR, Labor markets, Minimum wage, Pay, Public investment spending, Spiral emerging, State, Wage growth, Wages, Western Europe

Publication Details

Pages:

55
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2018/126
Stock No:

1ESTEA2018002
ISBN:

9781484357354
ISSN:

1934-7685

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