The Euro and Structural Reforms
This paper investigates whether or not the adoption of the Euro has facilitated the introduction of structural reforms, defined as deregulation in the product markets and liberalization and deregulation in the labor markets. After reviewing the theoretical arguments that may link the adoption of the Euro and structural reforms, we investigate the empirical evidence. We find that the adoption of the Euro has been associated with an acceleration of the pace of structural reforms in the product market. The adoption of the Euro does not seem to have accelerated labor market reforms in the "primary labor market;" however, the run up to the Euro adoption seems to have been accompanied by wage moderation. We also investigate issues concerning the sequencing of goods and labor market reforms.
Prepared for the NBER Conference on Europe and the Euro, October 17 & 18, 2008. We thank Olivier Blanchard, Francesco Caselli, Francesco Giavazzi, Guido Tabellini, Silvana Tenreyro and our discussant Otmar Issing for very useful comments and Carlo Prato and Roberto Robatto for excellent research assistantship. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
- In countries preparing to enter the Euro during the period from 1993 to 1998, there have indeed been signs of substantial wage moderation...
Alberto Alesina & Silvia Ardagna & Vincenzo Galasso, 2011. "The Euro and Structural Reforms," Review of Economics and Institutions, UniversitÃ di Perugia, Dipartimento Economia, Finanza e Statistica, vol. 2(1). citation courtesy of