This paper analyses the case of a monetary union between identical countries characterised by oligopolistic competition in their labour market. It suggests that the switch to a common currency may improve their macroeconomic performances depending on labour market features.

Using a New-Keynesian small open economy model, we examine the effects of central bank transparency on inflation persistence. We have found that more opacity could reinforce the effect of persistent shocks on the level and variability of endogenous variables if the difference between the...