Optimal Currency Areas with Labor Market Frictions

• 成果类型: Article
• 署名作者: Roi
• 署名单位: University of Chicago
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20190002
• 发表日期: 2022
• 页码: 44-95
• 关键词: optimal monetary-policy; nominal wage rigidity; European unemployment; search; DYNAMICS; prices; institutions; inflation; COSTS

摘要

I study efficiency and optimal monetary policy in a two-country monetary union with frictional labor markets. With heterogeneity in labor market frictions, the constrained efficient allocation generically cannot be achieved even if productivity shocks affecting each country are the same. The second-best optimal policy targets smaller inflation and output gaps in the more sclerotic labor market. A quantitative calibration to the eurozone implies welfare gains from redefining the union's inflation target to put more weight on its sclerotic members.