The Single Currency and Labour Market Flexibility: A Necessary Partnership?

Posted: 24 Nov 2000

See all articles by Maria Demertzis

Maria Demertzis

Bruegel

Yue Ma

City University of Hong Kong (CityUHK) - Department of Economics & Finance

Andrew J. Hughes

Cardiff Business School; Centre for Economic Policy Research (CEPR); Vanderbilt University - College of Arts and Science - Department of Economics

Abstract

This paper examines the macroeconomic consequences of rigidities in the European labour markets, and shows that attempts to impose a single monetary regime on economies with different structures can lead to a breakdown in coordination. Such breakdowns can occur when expenditure-switching effects are dominated by the income effects of greater policy discipline. Market flexibility should therefore be given greater importance than the process of policy formulation in the 'New Europe'.

JEL Classification: F30, J00

Suggested Citation

Demertzis, Maria and Ma, Yue and Hughes Hallett, Andrew J., The Single Currency and Labour Market Flexibility: A Necessary Partnership?. Scottish Journal of Political Economy, Vol. 47, Issue 2, May 2000. Available at SSRN: https://ssrn.com/abstract=234992

Maria Demertzis (Contact Author)

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium, 1210
Belgium

Yue Ma

City University of Hong Kong (CityUHK) - Department of Economics & Finance ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

HOME PAGE: http://www.cb.cityu.edu.hk/staff/yuema24

Andrew J. Hughes Hallett

Cardiff Business School ( email )

Aberconway Building
Cardiff CF10 3EU
United Kingdom
+44 292 087 001 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

Box 1819 Station B
Nashville, TN 37235
United States
615-322-8539 (Phone)
615-343-8495 (Fax)

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