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Changes in behaviour under EMU
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DOI：10.1016/j.econmod.2008.07.011.png)
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Using a simple model of the euro area economy, we explore whether EMU has been associated with changes in behaviour both in the run up to Stage 3 and since it started operating. We find that some behaviour has indeed changed; expectations formation, inflation, country dispersion of behaviour, fiscal policy (although the run up to Stage 3 shows a greater change than within it) and monetary policy (with several caveats). However, EMU does not appear to be associated with changes in the labour markets; employment, output growth and productivity. Substantial caution is needed in attributing these changes to EMU as much of the rest of OECD enjoyed similar changes over the same period. (C) 2008 Elsevier B.V. All rights reserved.
Keyword:
EMU
Euro area
Monetary policy
Fiscal policy
Labour markets
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