It is conventionally held that countries are worse off by forming a monetary union when it comes to macroeconomic stabilization. However, this conventional view relies on assuming that monetary policy is conducted optimally. Relaxing the assumption of optimal monetary policy not only uncovers...

Membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than nonmembership. For example, entry into a monetary union may cause a move from a non-indexation to an indexation equilibrium. But more wage...

We present a new approach to study empirically the effect of the introduction of the euro on the pattern of currency invoicing. Our approach uses a compositional multi-nomial logit model, in which currency choice is explained by both currency-specific and country-specific determinants. We use...

There are many issues associated with the Eurozone accession of Poland. The goal of this paper is to analyse one, but very important aspect, namely – the macroeconomic impact of the loss of autonomous monetary policy. In order to answer this question, we build a two country DSGE model with...

The excessive high public debt of almost all member states of the euro area, resulting from diverging tendencies of economic development, requires appropriate adjustment mechanisms. The crucial role of industrial relations is strengthened by the introduction of the economic policy instruments of...