In this paper we analyze how the creation of a single currency regime changes the strategic relationship between policy makers, both within and across countries. in particular we look at the role of cross-country externalities and lack of commitment. When labor taxation is excessive, due to...

In this paper we analyse how the creation of a single currency regime changes the strategic relationship between policy-makers, both within and across countries. In particular we look at the role of cross-country externalities and lack of commitment. When labour taxation is excessive, due to...