tag:blogger.com,1999:blog-582368152716771238.post7683220044788885458..comments2024-03-28T09:32:23.535-05:00Comments on The Grumpy Economist: Slok on Greek WagesJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-582368152716771238.post-64543141345904392052014-09-11T14:03:32.843-05:002014-09-11T14:03:32.843-05:00Or not so competitive. Data (http://www.esee.gr/Pr...Or not so competitive. Data (http://www.esee.gr/Profile.aspx in Greek) for the first 6 months of 2014 show that while tourism increased by 16.5 pct compared to last year tourist spend less during their vacation. Part of the reason is the "all inclusive" deals and part that tourists (still) find prices very expensive.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-51262225780064884172014-07-19T16:23:07.586-05:002014-07-19T16:23:07.586-05:00German wages were much more than Greek even at the...German wages were much more than Greek even at the higher point of bubble.Lower wages are part of competiveness solution though other things missing there will be no competiveness advantage because of lower wages.Informal economy has been raised as cost of living didn't lower and the average small business can't survive with having staff normally in payroll as the demand has collapsed.Lower wages have been > 30% in public service positions while the self employed and private sector employees face over 50% in income (adj for taxes). Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-61667203989813791192014-07-18T19:19:17.331-05:002014-07-18T19:19:17.331-05:00Developed? The initial reports I saw of the Greek ...Developed? The initial reports I saw of the Greek crisis talked about rampant tax evasion. The gist of the reports was that the large informal economy is why the Greek government got in trouble in the first place.Thomas Whttps://www.blogger.com/profile/05701283200252131890noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-11855545933732361892014-07-02T08:18:43.314-05:002014-07-02T08:18:43.314-05:00John,
From the graph: before 2010, Greek wages we...John,<br /><br />From the graph: before 2010, Greek wages were rising twice as fast as German wages.<br /><br />I think that's an important part as to why Greece is in such troubles.richardnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3965896607413253702014-07-02T07:52:52.516-05:002014-07-02T07:52:52.516-05:00Prof Cochrane,
I unfortunately have to agree with...Prof Cochrane,<br /><br />I unfortunately have to agree with the first poster on this, I've yet to read, from any serious economist, the claim that wages are 'nominal wages may never fall' or 'eternally sticky wages'; I see where you're coming with this, you're quite rightly trying to highlight the problems of arguing that sticky wages have the sufficient explanatory power by themselves for what's happened in the last 5 years and are just doing so in a hyperbolic way... but I think, and I mean in this in the best way possible, that you could have expressed this a bit better.Pedronoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-54598367065895738412014-07-02T06:43:45.508-05:002014-07-02T06:43:45.508-05:00The data is pretty clearly funky. I suspect the c...The data is pretty clearly funky. I suspect the creator of the graph is using US dollar denominated wages and possibly inflation indexing the US dollar prices. The point of sticky wages is that nominal prices in the domestic currency (Euros here) are sticky.<br /><br />Here are the OECD average annual wages:<br /><br />2008 2009 2010 2011 2012<br />20 973 22 120 21 048 20 542 19 807<br /><br />This is a 3-4% fall per year, starting in 2009 not 2010 - maybe the quarterly start makes a difference. So 7-8 years to get a 25% fall in nominal wages. Which I think is pretty close to the "years of stagnation" claim.<br />Patrick Chttps://www.blogger.com/profile/11010956691509926206noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-51382685931205417202014-07-01T05:27:00.836-05:002014-07-01T05:27:00.836-05:00I still want to see a review of Cochrane's pap...I still want to see a review of Cochrane's paper recently delivered to the Hooverites at Stanford....would Europe be better off doing a lot of QE and bulging their bank reserves too? <br /><br />As for the Greeks, I hope they can do better. A 25 percent cut in pay is a wallop. Ouch. They have huge unemployment too. Ugly time. One cannot say austerity and tight money have worked for the Greeks. This is a success story? <br /><br />The Fed did a lot of QE, and the US economy has fared better than Europe's. Is that the reason? Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-10533847182750175502014-07-01T03:13:22.499-05:002014-07-01T03:13:22.499-05:00With 25 per cent unemployment, I hope wages do fal...With 25 per cent unemployment, I hope wages do fall!!<br /><br />You should also note a large informal economy has now developed in Greece.<br /><br />Sticky wages arguments are nonsense anyway. This is just a fixation of MIT-Chicago debates among applied mathematicians. There are plenty of historical case studies where anti-cyclical policy has worked whether prices are flexible or not (eg preWWII anti-cyclical policy worked with flexible prices almost everywhere). Keynes did not say that rigid prices are a pre-condition. <br /><br />Sticky prices, like rational expectations, has been a massive distraction.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-20622322380266848672014-06-30T20:58:37.754-05:002014-06-30T20:58:37.754-05:00I see thanks!I see thanks!LALhttps://www.blogger.com/profile/08196675112184615614noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3412878511206436502014-06-30T18:40:51.639-05:002014-06-30T18:40:51.639-05:00In Germany negotiated wags have the force of law, ...In Germany negotiated wags have the force of law, i.e a minimum wage for each occupation in each industry in each region. Yes, there are residual labor markets in the country where this is not true. Yes, there will be different volatilities, but that would apply to a small share of all workers.Frank https://www.blogger.com/profile/00272351675231621678noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-59230421571147352014-06-30T14:36:31.417-05:002014-06-30T14:36:31.417-05:00Wages aren't the only price. I believe LOTS of...Wages aren't the only price. I believe LOTS of prices fell in 1920/1921 U.S.TGGPhttps://www.blogger.com/profile/11017651009634767649noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-87766178622767713862014-06-30T13:16:18.621-05:002014-06-30T13:16:18.621-05:00I dont't quite get what negotiated hourly earn...I dont't quite get what negotiated hourly earnings are vs the index? I'm sure the trends would be the same but the different volatilities makes me suspiciousLALhttps://www.blogger.com/profile/08196675112184615614noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-27299152301072921222014-06-30T12:34:01.761-05:002014-06-30T12:34:01.761-05:00Is anyone here aware of any country in history tha...Is anyone here aware of any country in history that had a major demand shock like greece and somehow managed to get out of the recession because of falling wages? The only case I know of is the recession of 1920/21 in the US, and it is actually not a very clear case because it happens so shortly after WW1.SvenRnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-18101268703414560712014-06-30T11:20:38.154-05:002014-06-30T11:20:38.154-05:00What common view holds that wages are forever stic...What common view holds that wages are forever sticky? That seems like a straw man. Anonymousnoreply@blogger.com