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EU Labour Markets and Monetary Union
Author(s) -
Jackman Richard,
Savouri Savvas
Publication year - 1998
Publication title -
economic outlook
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.1
H-Index - 8
eISSN - 1468-0319
pISSN - 0140-489X
DOI - 10.1111/1468-0319.00122
Subject(s) - economics , inflation (cosmology) , flexibility (engineering) , unemployment , currency , wage , labour market flexibility , currency union , international economics , single currency , labour economics , european union , low wage , monetary economics , macroeconomics , physics , management , theoretical physics
How can European labour markets cope with a single currency? The single currency success story is the US, which has maintained low unemployment rates both in the country as a whole and in individual regions. But Richard Jackman and Savvas Savouri argue this has been achieved by massive migration of workers from depressed to prosperous areas. In Europe migration within countries is quite low and between countries essentially non‐existent. Thus in Europe, unlike in the US, the adjustment to national or regional labour market shocks will depend on wage flexibility. Unhappily wages in Europe are not very flexible, particularly in conditions of low inflation, and the single currency may make them even less so. The prospect for depressed areas is thus bleak.