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The policy mix and policy coordination in EMU - how can it contribute to higher growth and employment?

Author

Listed:
  • Andrew Watt

    (Senior researcher, ETUI awatt@etuc.org)

  • Volker Hallwirth

    (German Federal Ministry of Economics and Labour: the views expressed here are personal and may not be attributed to the Ministry)

Abstract

This article makes a case for improved coordination between the three main areas of economic policy - monetary, fiscal and wage policy - in the context of EMU. Focusing in particular on the monetary-wage policy link, it argues that, in an uncertain world, a coordinated macro policy mix would produce superior results than the current policy assignment, raising the rate at which the European economy can grow without inflationary pressures. However, such a strategy must overcome a number of practical difficulties and political opposition. The Macroeconomic Dialogue could provide a forum for discussions between policy actors on a more cooperative, growth and employment-oriented strategy. Trade unions must play a key role both in coordinating their wage policies and in promoting greater interaction with the other policy-mix actors.

Suggested Citation

  • Andrew Watt & Volker Hallwirth, 2003. "The policy mix and policy coordination in EMU - how can it contribute to higher growth and employment?," Transfer: European Review of Labour and Research, , vol. 9(4), pages 610-632, November.
    • Handle: RePEc:sae:treure:v:9:y:2003:i:4:p:610-632
    DOI: 10.1177/102425890300900407
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    References listed on IDEAS

    as
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    5. Paul De Grauwe, 2002. "Central Banking as Art or Science?: Lessons from the Fed and the ECB," International Finance, Wiley Blackwell, vol. 5(1), pages 129-137.
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