Trade flows within the euro area have increased and their nature has changed, with a lot more trade at the intensive margin and export price compression.2 However, labour markets remained rigid in essentially all member countries. Labour within individual euro area countries has traditionally been significantly less mobile than labour in this country.
Economic research shows that in the United States, in the year after a regional labour demand shock, labour mobility accounts for about one-half of the increase in regional employment resulting from that shock.