The paper studies the determinants of unemployment in a two-countrymodel, where real wages are the outcome of the strategic interaction between various institutional players (firms, unions, central banks). We show that: (i) the results derived in the recent literature on this topic are not...

Governments seem to influence the decisions taken by the Governing Council of the ECB. It's been argued that the publication of forecasts and minutes of the Governing Council's meetings would have a negative effect due to the influence of governments on their representatives' votes. In my model,...

Two seemingly unconnected empirical results suggest an intriguing mechanism. First, economic integration helps harmonize prices internationally, with trade being the primary channel (Rogoff 1996, Goldberg and Knetter 1997). Second, monetary union may greatly increase the amount of trade among...