{"id":435795,"date":"2025-10-16T10:13:59","date_gmt":"2025-10-16T08:13:59","guid":{"rendered":"https:\/\/www.wifo.ac.at\/publication\/435795\/"},"modified":"2025-10-16T10:14:00","modified_gmt":"2025-10-16T08:14:00","slug":"the-role-of-labor-market-institutions-in-shaping-euro-area-monetary-policy-transmission","status":"publish","type":"publication","link":"https:\/\/www.wifo.ac.at\/en\/publication\/435795\/","title":{"rendered":"The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission"},"content":{"rendered":"","protected":false},"featured_media":0,"template":"","class_list":["post-435795","publication","type-publication","status-publish","hentry"],"acf":{"subtitle":"","text":"We examine how labor market institutions shape monetary policy transmission in euro area countries. A theoretical model suggests that higher union density flattens the Phillips curve, amplifying output responses while dampening the inflation effects of monetary shocks. This is empirically confirmed using an interacted panelVAR. In contrast, benefit replacement rates and employment protection legislation have a limited impact. Our findings point to a structural, not cyclical, driver of monetary policy effectiveness, highlighting the importance of labor market features. In a monetary union, such heterogeneity can lead to inefficient inflation and output differentials across member states.","onlinedate":"2025-10-16 08:14:00","lang":"English","publication_series":"","publication_date":"20251016","publication_date_year":"","publication_date_full":true,"publication_num_pages":"62","keywords":"[\"Monetary policy\",\"Labor market institutions\",\"Euro area\",\"Interacted panel VAR\"]","jelcodes":"[\"C32\",\"C33\",\"E52\",\"J21\",\"J38\"]","related_publications":"[]","pdf":435797,"zip":null,"link":"","monthly_report":true,"monthly_report_main":false,"monthly_report_volume":"","monthly_report_pages":"","monthly_report_pages_sort":"0","issue":"713","journal":"WIFO Working Papers","publisher":"","invisible":false,"external":false,"embargo_date":null,"types":[44410],"research_groups":[3500],"collaboration":"","persons":[18325,3543],"persons_data":"[{\"personId\":18325,\"personName\":\"Maximilian Boeck\",\"organisationNames\":[\"FAU\"]},{\"personId\":3543,\"personName\":\"Christian Glocker\",\"organisationNames\":[]}]","clients":[10660],"subclients":[],"partners":[],"topics":[],"host_publication_title":"","host_publication_subtitle":"","place_of_publication":"","host_publication_editors":"[]","type_description":"","output_media":"","chapter":"","article_number":"","citations":"{\"apa\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_apa rendering_contributiontoperiodical rendering_apa rendering_contributiontoperiodical_apa\\\">Boeck, M.<span>, &amp; Glocker, C.<\\\/span> (2025). <span>The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission<\\\/span>. <span><em>WIFO Working Papers<\\\/em><\\\/span>, (713).<\\\/div>\",\"vancouver\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_vancouver rendering_contributiontoperiodical rendering_vancouver rendering_contributiontoperiodical_vancouver\\\">Boeck M<span>, Glocker C<\\\/span>. <span class=\\\"title\\\"><span>The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission<\\\/span><\\\/span>. <span>WIFO Working Papers<\\\/span>. 2025 Oct 16;(713).<\\\/div>\",\"bibtex\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_bibtex rendering_contributiontoperiodical rendering_bibtex rendering_contributiontoperiodical_bibtex\\\"><div>@misc{f4bf374d15d645b282f7e02ea3dfa8e9,<\\\/div><div>  title    = \\\"The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission\\\",<\\\/div><div>  abstract = \\\"We examine how labor market institutions shape monetary policy transmission in euro area countries. A theoretical model suggests that higher union density flattens the Phillips curve, amplifying output responses while dampening the inflation effects of monetary shocks. This is empirically confirmed using an interacted panelVAR. In contrast, benefit replacement rates and employment protection legislation have a limited impact. Our findings point to a structural, not cyclical, driver of monetary policy effectiveness, highlighting the importance of labor market features. In a monetary union, such heterogeneity can lead to inefficient inflation and output differentials across member states.\\\",<\\\/div><div>  keywords = \\\"Monetary policy, Labor market institutions, Euro area, Interacted panel VAR\\\",<\\\/div><div>  author   = \\\"Maximilian Boeck and Christian Glocker\\\",<\\\/div><div>  year     = \\\"2025\\\",<\\\/div><div>  month    = oct,<\\\/div><div>  day      = \\\"16\\\",<\\\/div><div>  language = \\\"English\\\",<\\\/div><div>  journal  = \\\"WIFO Working Papers\\\",<\\\/div><p>}<\\\/p><\\\/div>\",\"ris\":\"<div class=\\\"rendering rendering_researchoutput  rendering_researchoutput_ris rendering_contributiontoperiodical rendering_ris rendering_contributiontoperiodical_ris\\\"><p>TY  - GEN<\\\/p><p>T1  - The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission<\\\/p><p>AU  - Boeck, Maximilian<\\\/p><p>AU  - Glocker, Christian<\\\/p><p>PY  - 2025\\\/10\\\/16<\\\/p><p>Y1  - 2025\\\/10\\\/16<\\\/p><p>N2  - We examine how labor market institutions shape monetary policy transmission in euro area countries. A theoretical model suggests that higher union density flattens the Phillips curve, amplifying output responses while dampening the inflation effects of monetary shocks. This is empirically confirmed using an interacted panelVAR. In contrast, benefit replacement rates and employment protection legislation have a limited impact. Our findings point to a structural, not cyclical, driver of monetary policy effectiveness, highlighting the importance of labor market features. In a monetary union, such heterogeneity can lead to inefficient inflation and output differentials across member states.<\\\/p><p>AB  - We examine how labor market institutions shape monetary policy transmission in euro area countries. A theoretical model suggests that higher union density flattens the Phillips curve, amplifying output responses while dampening the inflation effects of monetary shocks. This is empirically confirmed using an interacted panelVAR. 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In a monetary union, such heterogeneity can lead to inefficient inflation and output differentials across member states.<\\\/p><p>KW  - Monetary policy<\\\/p><p>KW  - Labor market institutions<\\\/p><p>KW  - Euro area<\\\/p><p>KW  - Interacted panel VAR<\\\/p><p>M3  - WIFO series<\\\/p><p>JO  - WIFO Working Papers<\\\/p><p>JF  - WIFO Working Papers<\\\/p><p>ER  - <\\\/p><\\\/div>\"}","scientific_assistance":"[\"Czaloun Astrid\"]","scientific_review":"[]","version":"","release_date":null,"expiration_date":null,"surveyor":"","research_assistance":"","edv":"","additional_info_de":"","additional_info_en":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission - WIFO<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.wifo.ac.at\/en\/publication\/435795\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.wifo.ac.at\/en\/publication\/435795\/\" \/>\n<meta property=\"og:site_name\" content=\"WIFO\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/WIFOat\/\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-16T08:14:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.wifo.ac.at\/wp-content\/uploads\/2024\/05\/WIFO-Gebaeude-FotoAlexanderMueller-www.alexandermueller.at-IMG_6326-Bearbeitet-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1280\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@WIFOat\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/435795\\\/\",\"url\":\"https:\\\/\\\/www.wifo.ac.at\\\/en\\\/publication\\\/435795\\\/\",\"name\":\"The Role of Labor Market Institutions in Shaping Euro Area Monetary Policy Transmission - 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