Is Small Really Beautiful? Explaining Different Unemployment Performances within the Euro-Zone
(2003) Is Small Really Beautiful? Explaining Different Unemployment Performances within the Euro-Zone . European Political Economic Review 1(2):pp. 126-151.
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Abstract
This article asks why unemployment performance in small countries in European Monetary Union has been superior to that in large EMU countries. Within a model of monopolistic competition, it is shown that a possible answer is a beggar-thy-neighbor policy by the small countries. When dropping the real balance effect from a standard model of monopolistic competition, it is found that a monopoly trade union setting wages for a large economy cannot influence employment and output by changing nominal wages. A trade union in a small country which is in a monetary union with a large country, on the other hand, can increase output and employment by wage restraint.
| Item Type: | Journal Article |
|---|---|
| Public Domain: | No |
| Refereed: | No |
| Status: | Published |
| Authors, Individual: | Dullien, Sebastian. |
| Title: | Is Small Really Beautiful? Explaining Different Unemployment Performances within the Euro-Zone |
| Language: | English |
| Publisher: | European Political-Economy Infrastructure Consortium (EPIC) |
| Publication: | European Political Economic Review |
| Journals and Series: | Journals > European Political Economy Review |
| Volume: | 1 |
| Number: | 2 |
| Pages: | pp. 126-151 |
| Year: | 2003 |
| Subjects: | EU policies and themes > Policies & related activities > employment/labour market > employment/unemployment EU policies and themes > Policies & related activities > economic and financial affairs > EMU/EMS/euro |
| Alternative Locations: | http://www.lse.ac.uk/collections/EPER/vol1/no2/dullien.pdf |
| ID Code: | 6042 |
| Deposited By: | Wilkin, Phil |
| Deposited On: | 23 March 2006 |
