Currency Stabilization through Full Employment: Can EMU Combine Price Stability with Employment and Income Growth?

Jan Kregel

Eastern Economic Journal, 1999, vol. 25, issue 1, pages 35-47

Abstract: The convergence criteria that were introduced to allow the creation of a common currency, the EURO, in the European Union appear to sacrifice growth and employment for price stability. Yet, this conflict will have to be resolved if the European project is to succeed. This paper suggests that existing policies, such as export-led growth will be ineffectual, and proposes a method to combine price stability with full employment and potential growth through a central bank policy to stabilise conditions in the labor market via an "employer" of last resort program.

Keywords: EMU; Employment; Full Employment; Stabilization (search for similar items in EconPapers)
JEL-codes: E24 F36 (search for similar items in EconPapers)
Date: 1999
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