Working Paper: NBER ID: w14479
Authors: Alberto Alesina; Silvia Ardagna; Vincenzo Galasso
Abstract: This paper investigates whether or not the adoption of the Euro has facilitated the introduction of structural reforms, defined as deregulation in the product markets and liberalization and deregulation in the labor markets. After reviewing the theoretical arguments that may link the adoption of the Euro and structural reforms, we investigate the empirical evidence. We find that the adoption of the Euro has been associated with an acceleration of the pace of structural reforms in the product market. The adoption of the Euro does not seem to have accelerated labor market reforms in the "primary labor market;" however, the run up to the Euro adoption seems to have been accompanied by wage moderation. We also investigate issues concerning the sequencing of goods and labor market reforms.
Keywords: Euro; Structural Reforms; Deregulation; European Labor Markets
JEL Codes: H10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| The adoption of the euro (F36) | acceleration of structural reforms in product markets (E69) |
| The adoption of the euro (F36) | acceleration of labor market reforms (J48) |
| The run-up to euro adoption (F36) | wage moderation (J38) |
| acceleration of structural reforms in product markets (E69) | acceleration of labor market reforms (J48) |