| Abstract [eng] |
The dissertation, consisting of four articles published in peer-reviewed international journals, investigates the interaction between labour market institutions (LMIs) and exchange rate regimes (ERRs) and its effect on economic growth, external balances, and the formation of growth models. By integrating the Optimum Currency Area (OCA) theory with the Growth Models (GM) framework, the dissertation addresses two questions: (1) how LMIs condition the impact of ERRs on growth and external balances; and (2) what role LMIs play in is shaping national growth models under fixed exchange rates. A mixed-methods research design is employed: three articles use large-N panel data analysis, while the fourth article presents a comparative case study of the Baltic States. The results indicate that countries with flexible LMIs are more likely to choose a fixed ERR; and that fixed ERRs positively affect long-term growth (especially in developing economies) and external balances when LMIs are flexible. The case study demonstrates that under conditions of highly flexible LMIs and euro area membership, a balanced growth model formed in the Baltic States over 2010–22, where exports and household consumption jointly contributed to economic growth. Thus, flexible LMIs not only act as a functional equivalent to a floating ERR in adjusting to external shocks but, by affecting income distribution and aggregate demand structure, they can also shape the long-term growth model. |
