of adjustment to these shocks are then compared to the results from US regional data. We find that the underlying shocks … are significantly more idiosyncratic across EC countries than across US regions, which may indicate that the EC will find … neighbors, experience shocks of similar magnitude and cohesion as the US regions. EC countries also exhibit a slower response to …

. This leads us to distinguish an EC "core" (made up of Germany and its immediate neighbors) and an EC periphery (made up of …

and the US. Second, it may improve macroeconomic management by increasing the responsiveness of wages and prices to market …