time series representations of the austrian labor market

abstract: this paper explores the time series properties of wages, prices, unemployment rate and interest in austria. in the first part, uni- and multivariate arma representations are estimated, where the order of the lag-polynomial is estimated. then the causal ordering of this variables is considered. the main results can be summarized as follows: the interest rate (nominal or real) is exogeneous to the others three variables and causes the unemployment rate (or equivalently employment) whichin turn causes the wage (nominal or real) and the price. whereas prices do cause the unemployment rate to some extent, there is no evidence of a feedback from wages to the unemployment rate. furthermore, wages and prices do cause each other. finally, these results are confronted with lucas and rapping's intertemporal substitution model and j.b. taylor's staggered wage contract model. in contrast to recent findings for the u.s. the austrian data are not in contradiction to the first model and present some support for the latter one.;