The pending enlargement of the European Monetary Union (EMU) has brought to the fore the discussion of the voting right distribution in the European Central Bank (ECB) council. We show that, in a model where labor unions internalize the inflationary consequences of wage setting, deviating from a...

This paper explores the interaction between labor market deregulation, monetary union and unemployment. Monetary policy autonomy and monetary union are compared in their influence on the optimal level of labor market deregulation consented to and wages demanded by labor unions. EMU leads to...