Economic Performance and Stabilization Policy in a Monetary Union with Imperfect Labour and Goods Markets

Alex Cukierman, Fabrizio Coricelli and Alberto Dalmazzo

No 2745, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper develops a framework for the analysis of the effects of institutions on economic performance in a monetary union in the presence of stabilization policy, unionized labour markets and monopolistically competitive price setting firms. Nominal wages are fixed contractually. In spite of full price flexibility transmission of monetary policy operates via both aggregate demand and aggregate supply channels. The Paper relates average, as well as country-specific, economic performance within the monetary union, broken down to country size, number of unions, the degree of product differentiation in product markets, and central bank conservativeness. Economic performance is characterized by unemployment, inflation, real wages and competitiveness. Both average, as well as country-specific, economic performance in the presence of (possibly) heterogeneous shocks and a unified stabilization policy are evaluated.

Keywords: Monetary union; Central bank conservativeness; Shocks; Stabilization; Stabilization policy; Wage bargaining; Monopolistic competition (search for similar items in EconPapers)
JEL-codes: E24 E31 E58 (search for similar items in EconPapers)
Date: 2001-03
References: Add references at CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
https://cepr.org/publications/DP2745 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:2745

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP2745

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().