This paper studies the incentives to join a monetary union, and the incentives to reform within a monetary union and within the candidate countries, respectively. We present some "orders of magnitude" evidence on the size and balance of the incentive effects for joining and being joined, and on...

Most people accept that structural and labour market reforms are needed in Europe. However few have been undertaken. The usual conjecture is that reforms are costly in economic performance and costly to finance. Blanchard and Giavazzi (2003) and Spector (2004) develop a general equilibrium model...