Is Small Really Beautiful? Explaining Different Unemployment Performances within the Euro-Zone
AbstractThis article asks why unemployment performance in small countries in European Monetary Union has been superior to that in large EMU countries. Within a model of monopolistic competition, it is shown that a possible answer is a beggar-thy-neighbor policy by the small countries. When dropping the real balance effect from a standard model of monopolistic competition, it is found that a monopoly trade union setting wages for a large economy cannot inßuence employment and output by changing nominal wages. A trade union in a small country which is in a monetary union with a large country, on the other hand, can increase output and employment by wage restraint.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by European Political Economy Infrastructure Consortium in its journal European Political Economy Review.
Volume (Year): 1 (2003)
Issue (Month): Autumn ()
EMU; wage bargaining;
Find related papers by JEL classification:
- F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof.Dr.Sebastian Dullien).
If references are entirely missing, you can add them using this form.