Figure 1.
Figure 2.
Figure 3.
Baseline scenario and shocks
| Base | μ↑ | A↓ | z↑ | |
|---|---|---|---|---|
| z | 1.8 | 1.8 | 1.8 | 1.9 |
| μ | 0.25 | 1/3 | 0.25 | 0.25 |
| A | 2 | 2 | 1.875 | 2 |
| A/(1 + μ) | 1.60 | 1.50 | 1.50 | 1.60 |
| W/P | 1.60 | 1.50 | 1.50 | 1.60 |
| un = z - A/(1 + μ) | 0.20 | 0.30 | 0.30 | 0.30 |
| L | 1,250 | 1,250 | 1,250 | 1,250 |
| Nn = L(1 - Un) | 1,000 | 875 | 875 | 875 |
| Yn = A·Nn | 2,000 | 1,750 | 1,641 | 1,750 |
Empirical evidence
| Germany | Poland | UK | US | OECD total | ||
|---|---|---|---|---|---|---|
| Unit labor | Pre-pandemic | 107.5 | 109.2 | 108.4 | 106.4 | 106.6 |
| Costs1 | Pandemic | 113.8 | 119.7 | 122.3 | 114.5 | 114.0 |
| Unemployment | Pre-pandemic | 3.1 | 3.6 | 4.0 | 3.8 | 5.5 |
| rate | Pandemic | 3.6 | 3.3 | 4.5 | 6.7 | 6.7 |
| Labor force1 | Pre-pandemic | 61.6 | 56.3 | 63.9 | 63.0 | 60.8 |
| Pandemic | 61.1 | 56.7 | 63.4 | 61.7 | 59.6 | |
| GDP1,2 | Pre-pandemic | 106.7 | 116.6 | 106.3 | 108.2 | 108.0 |
| Pandemic | 104.3 | 120.2 | 98.9 | 109.6 | 107.0 |