Why would the failure to create a uni?ed EU labor market be particularly harmful to the prospects for a smoothly functioning EMU?
10. Britain belongs to the EU, but it has not yet adopted the euro, and ?erce debate rages over the issue.
a. Find macro data on the British economy's performance since 1998 (in?ation, unem- ployment, real GDP growth) and compare these with euro zone data.
b. What were nominal interest rates in Britain and the euro zone after 1998? How would Britain have fared if the ECB had been setting Britain's nominal interest rate at the euro zone level and the pound sterling's euro exchange rate had been ?xed?