Dr Corrado Macchiarelli

This course is compulsory on the Executive MSc in Political Economy of Europe. This course is not available as an outside option.

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 briefly the political and economic rationale for the establishment of EMU and then examine in detail how these rationales played themselves out in practice (e.g. problems of free-riding, political exchange, information asymmetries between policymakers etc). 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 2010-11?; 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?

The course will run on 19th – 23rd June 2017

One essay - 2,000 words

Paul De Grauwe, The Economics of Monetary Union (Oxford University Press 2012, 7th 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 and Adam Posen (2009), The Euro at Ten: The Next Global Currency?, Peterson Institute for International Economics

Essay (50%).
Take home exam (50%) in the ST.