Why EMU is not a failure
AbstractAbout a decade ago, papers by Grüner and Hefeker (1999) and Cukierman and Lippi (2001) predicted that European Monetary Union may lead to higher inflation and unemployment in some participating countries. Meanwhile, we know that these predictions have not come true. The present paper develops a model of trade union behavior that explains why EMU was more successful than we predicted. The paper also sheds new light on the macroeconomic role of central bank flexibility.
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Bibliographic InfoArticle provided by Elsevier in its journal European Journal of Political Economy.
Volume (Year): 26 (2010)
Issue (Month): 1 (March)
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Web page: http://www.elsevier.com/locate/inca/505544
Common currency areas Central bank flexibility Central bank credibility;
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