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The Euro and Structural Reforms

In: Europe and the Euro

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  • Alberto Alesina
  • Silvia Ardagna
  • Vincenzo Galasso

Abstract

This paper investigates whether or not the adoption of the Euro has facilitated the introduction of structural reforms, defined as deregulation in the product markets and liberalization and deregulation in the labor markets. After reviewing the theoretical arguments that may link the adoption of the Euro and structural reforms, we investigate the empirical evidence. We find that the adoption of the Euro has been associated with an acceleration of the pace of structural reforms in the product market. The adoption of the euro does not seem to have accelerated labor market reforms in the ”primary labor market”; however, the run up to the Euro adoption seems to have been accompanied by wage moderation. We also investigate issues concerning the sequencing of goods and labor market reforms.

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This chapter was published in:

  • Alberto Alesina & Francesco Giavazzi, 2010. "Europe and the Euro," NBER Books, National Bureau of Economic Research, Inc, number ales08-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 11652.

    Handle: RePEc:nbr:nberch:11652

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Las raíces políticas de la crisis del Euro
      by Cives in Politikon on 2012-05-22 11:48:47
    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:
    1. Maria Manuel Campos & Mário Centeno, 2011. "Public-private wage gaps in the period prior to the adoption of the euro: an application based on longitudinal data," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
    2. Alison Johnston, 2011. "The Revenge of Baumol’s Cost Disease?: Monetary Union and the Rise of Public Sector Wage Inflation," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 2, London School of Economics / European Institute.
    3. Schilirò, Daniele, 2012. "A new governance for EMU and the economic policy framework," MPRA Paper 47454, University Library of Munich, Germany.
    4. Ioannou, Demosthenes & Stracca, Livio, 2011. "Have euro area and EU economic governance worked? Just the facts," Working Paper Series 1344, European Central Bank.
    5. Enrico Marelli & Marcello Signorelli, 2010. "Employment, productivity and models of growth in the EU," International Journal of Manpower, Emerald Group Publishing, vol. 31(7), pages 732-754, November.
    6. Alberto Alesina & Silvia Ardagna & Vincenzo Galasso, 2010. "The Euro and Structural Reforms," NBER Chapters, in: Europe and the Euro, pages 57-93 National Bureau of Economic Research, Inc.
    7. Ansgar Belke & Holger Zemanek & Gunther Schnabl, 2010. "Current Account Balances and Structural Adjustment in the Euro Area," Ruhr Economic Papers 0176, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    8. Roel Beetsma & Massimo Giuliodori, 2010. "The Macroeconomic Costs and Benefits of the EMU and Other Monetary Unions: An Overview of Recent Research," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 603-41, September.
    9. Bekaert, Geert & Harvey, Campbell R. & Lundblad, Christian T. & Siegel, Stephan, 2013. "The European Union, the Euro, and equity market integration," Journal of Financial Economics, Elsevier, vol. 109(3), pages 583-603.
    10. Elzbieta Bednarek-Sekunda & Richard Jong-A-Pin & Jakob de Haan, 2010. "The European Economic and Monetary Union and Labour Market Reform," European Union Politics, , vol. 11(1), pages 3-27, March.
    11. Schilirò, Daniele, 2011. "A new governance for the EMU and the economic policy framework," MPRA Paper 32235, University Library of Munich, Germany, revised Jul 2011.
    12. Criste, Adina, 2011. "Relevance Of The Optimum Currency Areas Model For The Process Of European Monetary Integration Within The New Context Of Crisis," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 15(4), pages 94-107.
    13. Sandrine Levasseur, 2011. "Labour market adjustments in Estonia during the global crisis," Sciences Po publications 2011-25, Sciences Po.
    14. Sandrine Levasseur, 2011. "labour markets adjustments in Estonia during the global crisis," Documents de Travail de l'OFCE 2011-25, Observatoire Francais des Conjonctures Economiques (OFCE).
    15. Ludwig , Maximilian, 2013. "Sovereign Borrowing for Dubious Reforms: A model with applications on the EMU," Working Papers 29/2013, Universidade Portucalense, Centro de Investigação em Gestão e Economia (CIGE).

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