Beyond the crisis: EMU and labour market reform pressures in good and bad times
There is a widespread perception among the public and policy-makers that EMU carries one-way pressures for enhanced flexibility in the labour market. We discuss the theoretical basis of this by examining four mechanisms through which the establishment of the common currency and the functioning of EMU can impact on the labour markets, both within the Eurozone and of the New Member States. We argue that the theory and empirics of the link between EMU and labour market flexibility are not conclusive, leaving room for varying degrees of, and directions for, the (de)regulation of national labour markets. This discretion is partly reflected in the experience of labour market reforms in the Eurozone. An examination of the institutional framework for employment policies in the EU further corroborates the conclusion that EMU does not restrict, but rather puts on the agenda, the active exploration of policy options aimed at strengthening the resilience and adaptability of the European economy as well as its quality, fairness and competitiveness. We argue that this is no different today, during or after the crisis, than it was ‘before it all started’.
|Date of creation:||Jun 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Houghton Street, London WC2A 2AE|
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/europeanInstitute/LEQS/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Albert Ma, C.T. & Weiss, A.M., 1991.
"A Signaling Theory of Unemployment,"
7, Boston University - Department of Economics.
- Susanne Lütz & Matthias Kranke, 2010. "The European Rescue of the Washington Consensus? EU and IMF Lending to Central and Eastern European Countries," LEQS – LSE 'Europe in Question' Discussion Paper Series 22, European Institute, LSE.
- Sibert, Anne & Sutherland, Alan, 2000. "Monetary union and labor market reform," Journal of International Economics, Elsevier, vol. 51(2), pages 421-435, August.
- Gilles Raveaud, 2007. "The European Employment Strategy: Towards More and Better Jobs?," Journal of Common Market Studies, Wiley Blackwell, vol. 45, pages 411-434, 06.
- Dyson, Kenneth & Featherstone, Kevin, 1999. "The Road To Maastricht: Negotiating Economic and Monetary Union," OUP Catalogue, Oxford University Press, number 9780198296386, July.
- Paul Grauwe & Marc-Alexandre Sénégas, 2004. "Asymmetries in Monetary Policy Transmission: Some Implications for EMU and its Enlargement," Journal of Common Market Studies, Wiley Blackwell, vol. 42(4), pages 757-773, November.
- Volker Clausen & Bernd Hayo, 2006.
"Asymmetric monetary policy effects in EMU,"
Taylor & Francis Journals, vol. 38(10), pages 1123-1134.
- Layard, R. & Nickell, S., 1991.
"Unemployment in the OECD Countries,"
Economics Series Working Papers
99130, University of Oxford, Department of Economics.
- Francesco Farina & Roberto Tamborini, 2004. ""Set a Sufficiently Ambitious Budget Target and Let the Automatic Stabilizers Work". Will it Really Work in the European Monetary Union?," Open Economies Review, Springer, vol. 15(2), pages 143-168, 04.
- Barro, Robert J. & Gordon, David B., 1983.
"Rules, discretion and reputation in a model of monetary policy,"
Journal of Monetary Economics,
Elsevier, vol. 12(1), pages 101-121.
- Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
- Paul De Grauwe, 2006. "What Have we Learnt about Monetary Integration since the Maastricht Treaty?," Journal of Common Market Studies, Wiley Blackwell, vol. 44, pages 711-730, November.
- Andrew Hughes Hallet & John Lewis, 2004. "How Successful Has the Stability and Growth Pact Been?: An Empirical Analysis," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 73(3), pages 392-404.
- Hughes Hallett, Andrew & Viegi, Nicola, 2003. "Labour Market Reform and the Effectiveness of Monetary Policy in EMU," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 18, pages 726-749.
- Boeri, Tito & Garibaldi, Pietro, 2006. "Are labour markets in the new member states sufficiently flexible for EMU?," Journal of Banking & Finance, Elsevier, vol. 30(5), pages 1393-1407, May.
- Stephen Nickell & Glenda Quintini, 2003.
"Nominal wage rigidity and the rate of inflation,"
Royal Economic Society, vol. 113(490), pages 762-781, October.
- Stephen Nickell & Glenda Quintini, 2001. "Nominal Wage Rigidity and the Rate of Inflation," CEP Discussion Papers dp0489, Centre for Economic Performance, LSE.
- Stephen Nickell & Glenda Quintini, 2001. "Nominal wage rigidity and the rate of inflation," LSE Research Online Documents on Economics 20131, London School of Economics and Political Science, LSE Library.
- Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147, July.
- P. De Grauwe & Sénégas Marc-Alexandre, 2004. "Asymmetries in monetary policy transmission: some implications for EMU and its enlargement," Post-Print hal-00150686, HAL.
- Calmfors, Lars, 2001. "Unemployment, Labor Market Reform, and Monetary Union," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 265-89, April.
- Susanne Lütz & Matthias Kranke, 2010. "The European rescue of the Washington Consensus? EU and IMF lending to Central and Eastern European countries," LSE Research Online Documents on Economics 53450, London School of Economics and Political Science, LSE Library.
- Tito Boeri & Katherine Terrell, 2002.
"Institutional Determinants of Labor Reallocation in Transition,"
Journal of Economic Perspectives,
American Economic Association, vol. 16(1), pages 51-76, Winter.
- Tito Boeri & Katherine Terrell, 2001. "Institutional Determinants of Labor Reallocation in Transition," William Davidson Institute Working Papers Series 384, William Davidson Institute at the University of Michigan.
- Damian Chalmers & Martin Lodge, 2003. "The open method of co-ordination and the European welfare state," LSE Research Online Documents on Economics 35993, London School of Economics and Political Science, LSE Library.
- Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
- Dave Turner & Elena Seghezza, 1999. "Testing for a Common OECD Phillips Curve," OECD Economics Department Working Papers 219, OECD Publishing.
- Vassilis Monastiriotis, 2007. "Union Retreat and Regional Economic Performance: The UK Experience," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 143-156.
When requesting a correction, please mention this item's handle: RePEc:eiq:eileqs:23. See general 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: (Katjana Gattermann)
If references are entirely missing, you can add them using this form.