We present a model of a currency area in which labor markets of country members are isolated but there is trade among these countries. When a country experiences a negative (resp. positive) shock, inflation goes down (up). This causes two effects. On the one hand the real interest rate of this...

We propose a model that represents the dynamic behaviour of a monetary union comprising two countries whose natural interest rates are initially unequal. This initial disparity and the subsequent application of a common monetary policy generate different national inflation rates and lead to...

This article uses a simple variation of the Solow model to study the interrelations between economic growth and the labor market. We show, both analytically and empirically, that income and capital per worker in the steady state depend positively on flexibility of the labor market; that the...