The paper addresses the question what effects the enlargement of a monetary union will have on necessary structural refoms in the (low distortion) member countries and the (high distortion) candidate country. While monetary union lowers reforms in the candidate country, members of the monetary...

The euro area economies are bound together by monetary policy while still inhibiting many heterogeneities. Amongst them the share of homeowners. This paper presents a medium scale New Keynesian DSGE model of the euro area with an extensive housing market which explicitly models endogenous tenure...