Asymmetries in European Labour Markets and Monetary Policy in Euroland. ENEPRI Occasional Paper No. 1, September 2003

[From the Introduction]. The present paper addresses some of the key issues the ECB would have to address to make the best of this combination of asymmetric labour markets and a common monetary policy. Research on these issues is widely scattered because both labour market and monetary policy specialists mainly just look at their own field. Hence, one purpose of this paper is to bring together two strands of the literature. The preliminary results suggest that the ECB may be well advised to reconsider its decision-making process. Further, since these asymmetries would pose less of a problem if labour markets were flexible and adapted more or less smoothly to changes in the economic environment, it is also important to analyse how far the attempts to liberalise European labour markets have progressed