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Labor markets and Monetary Union : A Strategic Analysis

Author

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  • Cukierman, A.

    (Tilburg University, Center For Economic Research)

  • Lippi, F.

Abstract

This paper shows that the effects of a monetary union depend on several labour market features. In particular, the switch from national monetary policies to a common monetary policy usually affects both inflation and unemployment, even when all structural parameters of the economy and of unions' and policymakers' preferences remain the same. The benchmark case of a monetary union between identical countries suggests that the switch to a monetary union is likely to make labour unions more aggressive, increasing unemployment. Qualifications to this result are provided under alternative institutional scenarios, like cross-country asymmetries, (pre-union) ERM membership and wage leadership.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cukierman, A. & Lippi, F., 1999. "Labor markets and Monetary Union : A Strategic Analysis," Discussion Paper 1999-100, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:fd6a7fdd-9a57-426e-9f6f-59e5d521cb06
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Monetary union; inflation; unemployment; labor unions; strategic monetary policy;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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