 Asymmetric Shocks, Structural Rigidities and Adjustment Capability in EMU - A ReviewSotiris Theodoropoulos European Research Studies Journal, 2005, vol. VIII, issue 3-4, 3-20 Abstract: The high degree of sustainable nominal convergence between EMU member states have not implied a corresponding degree of real and structural convergence. Still existing structural asymmetries in the monetary union, which is not an Optimum Currency Area, are bound to broaden due to continuous enlargement of Europe, giving rise to various kinds of shocks and divergences, poor economic performance in some member countries and to Europe as a whole. This paper examines the potential sources of asymmetries, which to a large extend determine the exposure to asymmetric shocks, or asymmetrical effects stemming from symmetric shocks. We also analyze available adjustment mechanisms and appropriate policy instruments in EMU’s economic reality. Using a set of economic indicators we investigate how some product and labor market rigidities affect in an adverse way macroeconomic performance in EMU. Having restricted the fiscal room for maneuver under the Stability and Growth Pact, existing asymmetries and structural rigidities call for a speed-up of structural reforms, as the only way to growth and prosperity. Keywords: EMU; optimum currency areas; asymmetries; asymmetric shocks; adjustment capability; product and labor market regulation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:viii:y:2005:i:3-4:p:3-20 Access Statistics for this article More articles in European Research Studies Journal from European Research Studies Journal |
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