Monetary union and labor market reform

Sibert, Anne (2000) Monetary union and labor market reform. Journal of International Economics 51 (2), pp. 421-436. ISSN 0022-1996.

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Official URL: https://doi.org/10.1016/S0022-1996(99)00013-6

Abstract

Policy makers’ incentives to undertake costly labor market reform depend on the international monetary system. A regime of noncooperative monetary policy is compared with monetary union. We find that noncooperative policy leads to more reform of factors that affect the inflation bias. Which regime leads to more reform of factors affecting labor market flexibility depends on the size of monetary policy spillovers and the degree of correlation of supply shocks. We show that monetary union produces higher expected inflation, but a lower variance of inflation. Welfare can be higher or lower with monetary union.

Metadata

Item Type:	Article
School:	Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
Depositing User:	Sarah Hall
Date Deposited:	28 Jul 2020 06:55
Last Modified:	02 Aug 2023 18:01
URI:	https://eprints.bbk.ac.uk/id/eprint/32706

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