Author (Person) | Burda, Michael C. |
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Publisher | Centre for European Policy Studies [CEPS] |
Series Title | ENEPRI Working Papers |
Series Details | No.3, March 2001 |
Publication Date | March 2001 |
ISBN | 92-9079-319-8 |
Content Type | Journal | Series | Blog |
Abstract: Widespread concern over real effects of EMU is consistent with new Keynesian approaches to macroeconomic fluctuations, but more difficult to reconcile with a real business cycle (RBC) paradigm. Using a model with frictions as a point of departure, I speculate that nominal price rigidity in Europe is likely to increase, while real rigidities are likely to decrease, as a consequence of monetary union. This logic implies a new European macroeconomic regime in which monetary policy is increasingly 'effective' in influencing output in the short run. Similarly, changes in the nature of real |
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Source Link | http://aei.pitt.edu/1866/1/ENEPRI_WP02.pdf |
Subject Categories | Economic and Financial Affairs, Employment and Social Affairs |
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