The Impact of EMU on Growth and Employment

This study addresses and evaluates the impacts of the introduction of the euro on both actual and potential output and employment in the Euro Area. In order to achieve this,
a descriptive and analytical examination of developments before and after the launch of the euro is undertaken, with comparisons drawn between countries that are EMU
members and non-EMU members. There are several channels through which the euro may have affected growth and employment: greater transparency and its impact on
competitiveness and the effectiveness of the single market; integration of financial markets, which may raise productivity; and a more stable macroeconomic environment, which affects risk and investment decisions. We analyse the impact of each of these channels on the drivers of growth, after controlling for factors such as workforce skills, research base, openness, demographic developments and structural reform on the evolution of output.