| Learning objectives |
To achieve the grade 12, students
should meet the following learning objectives with no or only minor
mistakes or errors: Upon the end of the course, the students will
be able to:
- Understand the historical background to European monetary
integration.
- Identify the pros and cons of forming a common currency
- Discuss the need for fiscal rules to constrain governments en
members of a monetary union
- Understand the role of financial markets to provide reliable
information to fiscal authorities
- Understand the background to the sovereign debt crisis in
Europe
- Discuss the room for manoeuvre to the European Central
Bank
- Explain various scenarios if the euro collapses and national
currencies are reintroduced.
- Relate the challenges of the euro area to other parts of the
developed world, primarily the US and JApan
|
| Course prerequisites |
| Basic knowledge of microeconomics,
macroeconomics and international economics. |
| Examination |
|
4-hour written
sit-in exam:
|
| Exam ECTS |
7,5 |
| Examination form |
Written sit-in exam |
| Individual or group exam |
Individual |
| Assignment type |
Written assignment |
| Duration |
4 hours |
| Grading scale |
7-step scale |
| Examiner(s) |
One internal examiner |
| Exam period |
Winter |
| Aids allowed to bring to the exam |
Limited aids, see the list below:
- Allowed dictionaries
- Allowed calculators
|
| Make-up exam/re-exam |
Same examination form as the ordinary exam
If the number of registered candidates for the make-up
examination/re-take examination warrants that it may most
appropriately be held as an oral examination, the programme office
will inform the students that the make-up examination/re-take
examination will be held as an oral examination
instead.
|
|
| Course content and
structure |
|
This course offers a detailed account of the process towards
economic and monetary union in Europe. After a short introduction
into the history and an overview of the major institutions of the
European Union, we will discuss the theoretical foundations of an
economic and monetary union. Then we study the key monetary and
fiscal policy arrangements in the euro area, including the European
Central Bank and the Stability and Growth Pact. In the final part,
we will evaluate the performance of the euro area in light of
accumulated evidence over the past decade, and we will look ahead
in order to provide an assessment of the risks and opportunities of
the euro area.
- Part I: History, facts and institutions
- History (BW, ch. 1)
- Facts, law, institutions and the budget (BW, ch. 2)
- Decision making (BW, ch. 3)
- Part II: Costs and benefits of a monetary union
- The Costs of a common currency (DG, ch. 1)
- The theory of optimum currency areas: A critique (DG, ch.
2)
- The benefits of a common currency (DG, ch. 3)
- Costs and benefits compared (DG, ch. 4)
- Optimal currency areas case studies: Is the enlarged European
Union an optimal currency area? Is Latin America an optimal
currency area? (DG, ch. 5)
- Part III: The European Monetary Union
- Incomplete monetary unions: The European Monetary System,
dollarization (DG, ch. 6)
- The transition to a monetary union: Problems of transition in
Central Europe, problems of transition of the UK (DG, ch. 7)
- The European Central Bank (DG, ch. 8)
- Monetary policy in the euro area (DG, ch. 9)
- Fiscal policies in monetary unions (DG, ch. 10)
- The euro and financial markets (DG, ch. 11)
- Part IV: Extensions (topics and material may be decided
together with the students)
- The European sovereign debt crisis
- Is the fiscal compact an ideal framework for the conduct of
fiscal policy in the euro area?
Enlargement of the euro area
|
| Teaching methods |
| Lectures |
| Further Information |
|
Schedule: Friday 11.40-14.25, week 36-41,43-48.
Changes in schedule may occur.
|
| Expected literature |
- Baldwin, Richard and Charles Wyplosz (2012), The Economics of
European Integration, 4th Edition, McGraw-Hill Education
(denoted by BW in the following).
- De Grauwe, Paul (2012), Economics of Monetary Union,
9th Edition, Oxford University Press (denoted by DG in
the following).
- Blanchard, O. and D. R. Johnson (2013), Macroeconomics,
Pearson. Chapter 9.
- Merler, S. and J. Pisani-Ferry (2012), “Sudden Stops in the
Euro Area”, Bruegel Policy Contribution, Issue 2012/06,
Brussels.
- The Economist (2012), “Breaking Up the Euro Area: The Merkel
Memorandum”, August 11-17, London.
- Peterson-Pew Commission on Budget Reform (2010), “Getting Back
in the Black”, November, Washington DC.
- Hughes Hallett, A. and Svend E. Hougaard Jensen (2012, “Fiscal
Governance in the Euro Area: Institutions vs. Rules”,Journal of
European Public Policy, 2012, vol. 19, pp.
646-664
|
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