The Effects of European Economic and Monetary Union on Wage Behaviour

This paper evaluates the possible consequences of the forthcoming European and Monetary Union on wage behaviour. It will be shown that EMU does not influence wage policy directly, but rather indirectly through its implications on other areas of economic policy, predominantly on monetary policy. Consequently, EMU will put increasing pressure on using wage policy as a flexible adjustment variable, since other adjustment mechanisms shall cease to exist. Six European countries were analysed empirically, which showed that in the past, southern European countries conducted a much more expansive wage... Mehr ...