Prof Paul De Grauwe COW 1.03

This course is available on the MPA in European Public and Economic Policy, MPA in International Development, MPA in Public Policy and Management, MPA in Public and Economic Policy, MPA in Public and Social Policy, MSc in International Employment Relations and Human Resource Management, MSc in Management, MSc in Management (CEMS MIM), MSc in Political Economy of Europe, MSc in Political Economy of Europe (LSE and Sciences Po), MSc in Political Science and Political Economy, MSc in Politics and Government in the European Union and MSc in Politics and Government in the European Union (LSE and Sciences Po). This course is available with permission as an outside option to students on other programmes where regulations permit.

A basic understanding of economic concepts is essential which is why the attendance of EU409 is highly recommended.

The purpose of this course is to analyse the process of European monetary integration and its implications for the institutions of economic governance in the EU. There will be a strong emphasis on using the experience of the financial and economic crises since 2008 as a source of evidence to assess both the performance of EMU and the theories about monetary integration. We consider the political and economic rationale for the establishment of EMU. We study the theory of optimal currency areas and its relevance today.  Indicative questions addressed in this course include: how and why did the EU develop the EMU project?; did economic theories prepare us for the Euro area crisis of 2010-12?; what are the challenges for member states in adjusting to the discipline of the 'Euro-zone'?; what issues arise for the EU in managing relations between member states in the Euro-zone and those outside?; how does the Euro affect the ability of member states to adjust to periods of crisis and to external shocks?; is the sovereign debt crisis of 2010 indicative of imbalances within the EU and basic flaws in its institutional design? How can these design failures be corrected? What is the role of the ECB in this process?

10 hours of lectures and 15 hours of seminars in the LT. 3 hours of seminars in the ST.

One 1,500-word essay and one group essay of up to 3,000 words.

Paul De Grauwe (2014) The Economics of Monetary Union (Oxford University Press, 10th ed.); Kenneth Dyson and Kevin Featherstone (1999) The Road to Maastricht, OUP; Special issue (2006): 'Economic Governance in EMU Revisited', Journal of Common Market Studies vol.44, No.4 (November); DG Ecfin (2009) Economic Crisis in Europe: Causes, Consequences and Responses, European Economy 7/2009; Jean Pisani-Ferry (2014) The Euro Crisis and Its Aftermath, Oxford University Press.

Exam (100%, duration: 2 hours) in the main exam period.