Where are the restrictions on bankers remuneration?

Stronger product market competition amplifies the effects of wage moderation.

Why has the apparent moderation of wages in the euro area not made firms more profitable and led to faster production growth?

And, in Italy, falling productivity has swamped any benefits from moderate wage developments, causing a sharp deterioration in competitiveness.

Over the past 20 years, wage moderation has indeed varied considerably among the 20 countries and, in particular, within the euro area.

The export boom was to a large extent driven by reduced costs resulting from outsourcing and domestic wage moderation.

The model also suggests that regulations that curb competition will tend to dampen the positive effects of wage moderation on economic performance.

Thus, wage moderation in the region was, on average, less effective in raising GDP growth and lowering unemployment.

What is more, wage moderation only makes sense if firms in turn reduce prices and boost their competitiveness.

Such restrictions vary over time and from country to country, causing large disparities in the effects of wage moderation.

Wage moderation has occurred in France and Italy since the 1980s and in Belgium, Germany, and Spain since the mid-1990s.

He finds that wage moderation does spur output and lower unemployment but that the magnitude of these effects depends on the degree to which countries’ product markets are regulated.

As for regulatory developments in product markets, they became more flexible between 1975 and 1998, increasing the pass-through from wage moderation to growth and employment.

Mr Wright also urged the corporation to “use its substantial licence fee income in an appropriate way”, which included showing “restraint on salaries for senior staff”.

redefine better targets, with more in depth and structural reforms instead of the moderation of minimum wages in the private sector and the raise of the tax burden on small and medium companies;