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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...
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of unemployment and wages or wage incomes. Participation rates and migrations are also touched upon. An expectation that … equilibrium values of relative wages and rates of unemployment after a business cycle. …
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