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The Euro and Structural Reforms

  • Alberto Alesina
  • Silvia Ardagna
  • Vincenzo Galasso

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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Article provided by Università di Perugia in its journal Review of Economics and Institutions.

Volume (Year): 2 (2011)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:pia:review:v:2:y:2011:i:1:n:2
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  1. Alberto Alesina & Silvia Ardagna & Francesco Trebbi, 2006. "Who adjusts and when? On the political economy of reforms," Harvard Institute of Economic Research Working Papers 2108, Harvard - Institute of Economic Research.
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  18. Adi Brender & Allan Drazen, 2004. "Political Budget Cycles in New versus Established Democracies," NBER Working Papers 10539, National Bureau of Economic Research, Inc.
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