Asymmetry and Aggregation in the EU

This book provides a unique study of the differences in economic behaviour according to the phases of the economic cycle in the countries of the European Union. It presents a comprehensive analysis of asymmetry in the EU over the last forty years, and shows that the problems in the global financial crisis were readily predictable. The authors use empirical research and panel data to show how much economic behaviour changes between the up and down phases of the business cycle, and the difficulties this creates for monetary, fiscal and labour market policies. The volume demonstrates how prescient the asymmetric design of the Stability and Growth Pact was in trying to offset countries understandable optimism in fiscal policy, and the consequent tendency not to manage debt successfully. It also reveals the inherent problems for managing unemployment in an asymmetric labour market. This book is essential reading for all interested in European economics, macroeconomics and European integration.

Introduction Measurement and Aggregation Aggregate Supply and demand in an Open Economy The Phillips Curve Regional and Sectoral Concerns Output, Unemployment and the Labour Market: The Okun Curve Asymmetry and the Role of the Public Sector Monetary Policy Fiscal Responses References