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Incertitude sur le taux de change et chômage dans les pays candidats : un argument pour l'euroïsation ?

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  • Ansgar Belke
  • Ralph Setzer

Abstract

The traditional ?optimum currency area? approach posits that little is lost in the transition to a very hard peg to a currency union if exchange rate variations are small. This paper looks at this approach from a different angle by considering that exchange rate volatility could well reflect high labor market costs. An analysis of the effect of exchange rate volatility on labor markets in the CEECs shows that exchange rate volatility significantly increases unemployment. The transition to a fixed exchange rate or the adoption of the euro could therefore be considered as a substitute for the removal of employment protection legislation.

Suggested Citation

  • Ansgar Belke & Ralph Setzer, 2004. "Incertitude sur le taux de change et chômage dans les pays candidats : un argument pour l'euroïsation ?," Economie & Prévision, La Documentation Française, vol. 163(2), pages 63-74.
    • Handle: RePEc:cai:ecoldc:ecop_163_0063
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    Cited by:

    1. Ian Babetskii, 2006. "Aggregate Wage Flexibility in Selected New EU Member States," Working Papers 2006/1, Czech National Bank, Research and Statistics Department.

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