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Unemployment, Labour-market Reform and Monetary Union

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  • Lars Calmfors

Abstract

The paper analyses various mechanism through which monetray union in Europe may affect unemployment. The focus is on the political incentives for labour-market reform. There will be more reform outside than inside the EMU to the extent that a national inflation bias can be reduced. But if there is a precautionary motive for low average unemployment in order to reduce the utility cost of macroeconomic variability, there could be more reform in monetary union. Labour-market reform to increase wage flexibility as a substitute for domestic monetary union on unemployment is ambiguous.

Suggested Citation

  • Lars Calmfors, 1998. "Unemployment, Labour-market Reform and Monetary Union," CESifo Working Paper Series 173, CESifo.
    • Handle: RePEc:ces:ceswps:_173
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    References listed on IDEAS

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    Cited by:

    1. Wyplosz, Charles, 1999. "Towards A More Perfect EMU," CEPR Discussion Papers 2252, C.E.P.R. Discussion Papers.
    2. Lucio R. Pench & Paolo Sestito & Elisabetta Frontini, 1999. "Some unpleasant arithmetics of regional unemployment in the EU. Are there any lessons for EMU?," European Economy - Economic Papers 2008 - 2015 134, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Karl Pichelmann, 2001. "Monitoring Wage Developments in EMU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 28(4), pages 353-373, December.
    4. Obstfeld, Maurice, 1998. "EMU: Ready, or Not?," Center for International and Development Economics Research, Working Paper Series qt8qn3v8j3, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    5. Tryggvi Thor Herbertsson & Gylfi Zoega, 2006. "On the fringe of Europe: Iceland's currency dilemma," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 7(02), pages 41-51, July.
    6. Nikolay Nenovsky & Kalina Dimitrova, 2002. "Dual Inflation Under the Currency Board: The Challenges of Bulgarian EU Accession," William Davidson Institute Working Papers Series 487, William Davidson Institute at the University of Michigan.
    7. PLASMANS, Joseph & MEERSMAN, Hilde & VAN POECK, André & MERLEVEDE, Bruno, 1999. "Generosity of the unemployment benefit systern and wage flexibility in EMU: Time- varying evidence in five countries," Working Papers 1999043, University of Antwerp, Faculty of Business and Economics.
    8. Carsten Hefeker, 2000. "Structural Reforms and the Enlargement of Monetary Union," CESifo Working Paper Series 270, CESifo.

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