In February 2006, the Governing Council of the Eurosystem decided to establish a network in which researchers from different central banks were instructed to study wage and labour cost dynamics in the euro area.

The tasks of this network are primarily to:

• examine, on the basis of macroeconomic data, the empirical features of wage and labour cost dynamics for the area as a whole, for each Member State and for the different sectors of the economy, as well as their determining factors and its interaction with the inflation dynamics;
• examine, on the basis of microeconomic data, wage behaviour and possible related rigidities at national and sectoral level, as well as their consequences for wage costs and price formation;
• examine the feasibility and advisability of a survey of individual companies relating to their behaviour in terms of labour costs and price setting.

The research department's contributions to the WDN can be consulted using the following links:

• Downward wage rigidity for different workers and firms: an evaluation for Belgium using the IWFP procedure (Working paper 124)
• How do firms adjust their wage bill in Belgium? A decomposition along the intensive and extensive margins (Working paper 127)
• Institutional features of wage bargaining in 23 European countries, the US and Japan (Working Paper 154)
• Understanding sectoral differences in downward real wage rigidity: workforce composition, institutions, technology and competition (Working Paper 156)
• Rigid labour compensation and flexible employment? Firm-level evidence with regard to productivity for Belgium (Working Paper 159)
• Inflation dynamics with labour market matching: assessing alternative specifications (Working paper 164)
• How are firms' wages and prices linked: Survey evidence in Europe (Working paper 174)
• Inter-industry wage differentials: How much does rent sharing matter? (Working paper 180)
• Downward nominal and real wage rigidity: Survey evidence from European firms (Working paper 182)
• The margins of labour cost adjustment: Survey evidence from European firms (Working paper 183)
• Inter-industry wage differentials in EU countries: What do cross-country time-varying data add to the picture? (Working paper 189)
• The incidence of nominal and real wage rigidity: An individual-based sectoral approach (Working paper 191)
• Wages, labor or prices: How do firms react to shocks? (Working paper 193)
• Wage structure effects of international trade: Evidence from a small open economy (Working paper 214)