This paper studies the incentives to join or enlarge a monetary union under alternative assumptions about the extent of market reform within the union and in candidate countries. Lack of labour mobility, wage/price flexibility or fiscal reform brings costs for both new entrants and in the...

Primary goal of stabilization policy in the Treaty of European Union is price stability. That goal may be in conflict with the goal of full employment in the member states, particularly, then the union are hit by an asymmetric shock. Assuming perfect capital mobility a initial adverse shock...

This paper studies the incentives to join or enlarge a monetary union under alternative assumptions about the extent of market reform within the union and in candidate countries. Lack of labour mobility, wage/price flexibility or fiscal reform brings costs for both new entrants and in the...