The euro zone crisis illustrates the insufficiency of adjustment mechanisms in a monetaryunion characterized by a large heterogeneity. Firstly, the paper gives an evaluationof exchange rate misalignments inside the euro zone, using a FEER approach(Jeong et ali., 2010). Usingpanel econometric...

Risk-sharing shall allow asymmetric shocks smoothing into a monetary union. Three adjustment channels could play: public transfers, credits, financial incomes between regions/countries. The literature underlines the actual weakness of this mechanism in Europe whereas it tends generally to...

Adjustment mechanisms through the labour market are studied following two approaches. First, relative prices flexibility is analysed with a macro-economic model estimated for 14 European countries. Model simulations are used to study the consequences of asymmetric shocks; wages and employment...