Jump to ContentJump to Main Navigation
From Convergence to CrisisLabor Markets and the Instability of the Euro$
Users without a subscription are not able to see the full content.

Alison Johnston

Print publication date: 2016

Print ISBN-13: 9781501702655

Published to Cornell Scholarship Online: January 2017

DOI: 10.7591/cornell/9781501702655.001.0001

Show Summary Details
Page of

PRINTED FROM Cornell University Press SCHOLARSHIP ONLINE (www.cornell.universitypressscholarship.com). (c) Copyright University of Cornell University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in Cornell for personal use. date: 25 September 2021

From Order to Disorder

From Order to Disorder

How Monetary Union Changed National Labor Markets

(p.26) 2 From Order to Disorder
From Convergence to Crisis

Alison Johnston

Cornell University Press

This chapter examines how monetary union changed national labor markets in Europe. It begins with a discussion of assumptions and theoretical foundations of a dual-sector economy consisting of the exposed or tradables sector and the sheltered or nontradables sector. It then considers the European Monetary System's exchange-rate mechanism, and how the Maastricht criteria restored sheltered sector employers' bargaining strength. It also explains how inflation convergence synchronized price competitiveness among European Economic and Monetary Union (EMU) candidate countries, accounting for the lack of divergence in the EMU North and South's current account balances. It shows that monetary union removed two institutional constraints that enhanced employers' ability to uphold wage moderation, which in turn facilitated low-inflation governance in national labor markets across Europe: national-level, non-accommodating central banks and the Maastricht criteria.

Keywords:   monetary union, labor markets, tradables sector, nontradables sector, European Monetary System, Maastricht criteria, inflation, European Economic and Monetary Union, wage moderation, central banks

Cornell Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.