LABOUR MOBILITY AS AN ADJUSTMENT MECHANISM IN THE EURO AREA

Cristina Puiu ()
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Cristina Puiu: Alexandru Ioan Cuza University of Iasi

CES Working Papers, 2011, vol. 3(4), issue 4, 579-591

Abstract: The aim of this paper is to assess the capacity of labour mobility in the euro area to act as an adjustment mechanism in the event of an asymmetric shock. According to the optimum currency area theory, labour mobility has been emphasized as one of the main adjustment mechanism. Given the present situation, where there are major concerns about the future of the euro area, it is necessary to study if the mechanism for stability works and if it can be improved. Considering the difficulty of quantifying the labour mobility, we have analyzed the net migration and the regulations regarding labour market. The empirical evidence shows that labour mobility does not act as a sufficient adjustment mechanism.

Keywords: geographical mobility; optimality; asymmetric shock; endogenous effect Romania (search for similar items in EconPapers)
JEL-codes: E42 F33 J61 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:jes:wpaper:y:2011:v:3:i:4:p:579-591

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