Prof Waltraud Schelkle CBG 6.01

This course is available on the MSc in Political Economy of Europe, MSc in Political Economy of Europe (LSE and Sciences Po) and MSc in The Global Political Economy of China and Europe (LSE and Fudan). This course is available with permission as an outside option to students on other programmes where regulations permit.

A basic understanding of economics and economic terms is highly recommended. Students who never had any teaching in economics should consult the online course EU409 and talk to the course convener.

In the first half, the course gives students insights into the post-war evolution of finance, its regulation and its relationship to the other sectors of the economy. The historical evolution, continuities and innovations, will be explored in a comparative perspective. In the second half, we take up topical debates in the political economy of finance literature. Two questions run through the course: first, how does the US experience differ from or resonate with discernible trends in European countries and the experience of European integration? And how do non-financial actors (governments, transnational firms, middle-class households) support the rise of finance even though the risks involved are not well understood and hard to manage? The course would deepen students’ understanding of the core courses in the Political Economy of Europe by making them aware of the role that finance played in different phases of post-war history and in European integration. 

Course outline:

1. The rise of finance and its elusive power

2. From financial repression to financial liberalisation and financialisation

3. State-bank ties

4. Finance-firm relationships

5. The household finance-welfare state nexus

6. Reading week

7. Public finances

8. Financial welfare

9. Macroeconomic stabilisation

10. Internationally coordinated regulation of financial markets

11. The politics of dominant finance

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

We plan do a simulation of G-20 negotiations on financial regulation in week 10, which has been successfully tried and tested before with MPA students. Using the report of the G20 Eminent Persons Group report on Global Financial Governance – Making the Global Financial Systems Work for All – the simulation will see students working in teams to represent the interests of particular nations and international organisations involved in global financial governance.

Students will be expected to produce 1 essay in the LT.

Students must write up a report of a workshop of their choice or help organise it. We will have 2 such workshops with invited speakers.

• Abdelal, Ravi (2007). Capital rules. The construction of global finance. Cambridge, MA and London, England: Harvard University Press
• Epstein, Rachel A. (2017). Banking on markets: the transformation of bank-state ties in Europe and beyond Oxford: Oxford University Press
• Kindleberger, Charles P., & Aliber, RobertZ. (2011). Manias, panics and crashes. A history of financial crises (6th ed.). Houndmills, Basingstoke: Palgrave Macmillan (selected chapters)
• Krippner, Greta R. (2005). The financialization of the American economy. Socio-economic review, 3(2), 173-208.
• MacKenzie, Donald A. (2006). An engine, not a camera: how financial models shape markets. Cambridge, Mass., London: MIT Press.
• Reinhart, Carmen M., & Sbrancia, M. Belen (2015). Debt Liquidation. Economic Policy (April), 291-333.
• Story, John, & Walter, Ingo (1997). Political economy of financial integration in Europe: the battle of the systems. Manchester: Manchester University Press.
• Woll, Cornelia (2014). The power of inaction: bank bailouts in comparison. Ithaca: Cornell University Press (selected case studies)

Online assessment (100%) in the ST.