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The Euro and Structural Reforms

In: Europe and the Euro

  • 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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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, September.
  • 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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