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dc.contributor.authorBibow, Jörgen_US
dc.date.accessioned2005-12-05en_US
dc.date.accessioned2010-05-14T11:08:50Z-
dc.date.available2010-05-14T11:08:50Z-
dc.date.issued2001en_US
dc.identifier.urihttp://hdl.handle.net/10419/31571-
dc.description.abstractThis paper investigates the lessons learned from Europe's convergence process of the 1990s. The paper challenges the conventional focus on labour market institutions and structural rigidities as the root cause of Europe's poor employment record. Instead, it is argued that macroeconomic demand management, particularly monetary policy, played the key role. Concentrating on Germany, the analysis shows that fiscal consolidation was accompanied by monetary tightness of an extraordinary degree and duration. This finding is of interest for the past as well as the future, for the Maastricht regime much resembles the one that produced the unsound policy mix of the 1990s: a constrained fiscal authority paired with an independent monetary authority free to impose its will on the overall outcome. The analysis thus highlights a key asymmetry in the Maastricht regime that is not unlikely to continue to inflict a deflationary bias on the system. It is argued that this policy bias may be overcome only if the ECB deliberately assumes its real role of generating domestic demand-led growth, thereby resolving Euroland's key structural problem: asymmetric monetary policy. Concerning the conventional structuralist theme, the analysis debunks the Dutch myth of supply-led growth through structural reform. Depicting a popular fallacy of composition, we stress that the peculiar Dutch strategy of demand-led growth does not present itself as an option for Euroland.en_US
dc.language.isoengen_US
dc.publisherThe Levy Economics Inst. of Bard College Annandale-on-Hudson, NYen_US
dc.relation.ispartofseriesWorking papers // The Levy Economics Institute 326en_US
dc.subject.ddc330en_US
dc.titleMaking EMU work: some lessons from the 1990sen_US
dc.typeWorking Paperen_US
dc.identifier.ppn503897590en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
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