This paper proposes a monetary model with firm entry as a means for alleviating the difficulties of real business cycle models in reproducing the smoothness and persistence of macroeconomic variables together with the volatility of profits and markups. Simulations show that my baseline model...

The introduction of the Euro in January 1999 consecrated the achievement of a single currency system within most of the European Union. Despite the dramatic change in the macroeconomic dynamics that this event is likely to have caused, the literature has paid little attention to testing for the...