Inflation and unemployment, new insights during the EMU accession

Jean-Louis Combes and Pierre Lesuisse

International Economics, 2022, issue 172, 124-142

Abstract: In the process of EU integration, toward the Eurozone (EA) accession, we try to understand, how changes in exchange rate regimes, attributed to the switch through the ERM-II and to the EA accession, influence the dynamic between inflation and unemployment, that is, swings on the Phillips curve coefficient. We look at a panel of EA countries, before and after their EA entry, over the last twenty years, using a recent work from McLeay and Tenreyro (2020), to clarify the impact of losing the monetary autonomy. Accession to the Eurozone leads to a non-significant inflation/unemployment relationship. We link this result to the fact that the small economies of the Eurozone do not have sufficient weight to influence the single monetary policy. This is corroborated by the fact that within the Eurozone, what we call the “economic leaders” maintain a significant trade-off between inflation and unemployment.

Keywords: Phillips curve; European monetary union; Panel (search for similar items in EconPapers)
JEL-codes: C33 E32 E52 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.sciencedirect.com/science/article/pii/S2110701722000713 (text/html)

Related works:
Journal Article: Inflation and unemployment, new insights during the EMU accession (2022)
Working Paper: Inflation and unemployment, new insights during the EMU accession (2022)
Working Paper: Inflation and Unemployment, new insights during the EMU accession (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiie:2022-q3-172-8

Access Statistics for this article

More articles in International Economics from CEPII research center Contact information at EDIRC.
Bibliographic data for series maintained by ().