Wage-setting is a key macroeconomic mechanism for employment and economic growth, and in a member state of a monetary union, its importance is even greater. Wages largely determine how the economy responds to shocks, as individual members of a monetary union do not have the possibility of resolving the situation via the exchange rate or by adjusting the nominal interest rate. Prices and wages also determine the real exchange rate of countries in a monetary union and thus play a key role in the development of competitiveness.