in seven years. Second, cross-country coordination of reforms would add extra benefits to each region in the euro area …

rest of the EA - REA), the US, and the rest of the world, region-specific labour markets with search and matching frictions …, and public employment. Our results are as follows. First, a permanent reduction in labour tax rates in the Home region … simultaneously in both Home and REA would have additional expansionary effects on the Home region. Third, in the short run the …