Labour Markets and Monetary Union: A Strategic Analysis

Alex Cukierman and Francesco Lippi

Economic Journal, 2001, vol. 111, issue 473, 541-65

Abstract: This paper shows that the effects of a monetary union depend on several labour market features. In particular, the switch from national monetary policies to a common monetary policy usually affects both inflation and unemployment, even when all structural parameters of the economy and of unions' and policymakers' preferences remain the same. The benchmark case of a monetary union between identical countries suggests that the switch to a monetary union is likely to make labour unions more aggressive, increasing unemployment. Qualifications to this result are provided under alternative institutional scenarios, like cross-country asymmetries, (pre-union) ERM membership and wage leadership.

Date: 2001
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Related works:
Working Paper: Labor Markets and Monetary Union; a Strategic Analysis (2000)
Working Paper: Labor Markets and Monetary Union: a Strategic Analysis (2000)
Working Paper: Labour Markets and Monetary Union: A Strategic Analysis (1999)
Working Paper: Labor markets and Monetary Union: A Strategic Analysis (1999)
Working Paper: Labor markets and Monetary Union: A Strategic Analysis (1999)
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