This paper takes a first step in analysing how a monetary union performs in the presence of labour market asymmetries. Differences in wage flexibility, market power and country sizes are allowed for in a setting with both country-specific and aggregate shocks. The implications of asymmetries for...

The working paper investigates the relationship between export performance and wage competitiveness in the manufacturing sector. Analyses in the paper show that among industrialised countries for the period since 1995 countries with the greatest deterioration in wage competitiveness have also...