• develop a relevant research question drawing upon themes considered in the course
• identify and employ substantial literature and (where necessary) empirical data for the chosen project
• demonstrate a high level of command of the concepts and theories used
• present comprehensive empirical evidence in regard with the chosen topic
• identify and discuss competing explanations, and
• write an argumentative paper with a clear structure that meets appropriate academic writing standards

The financial crisis of 2007/08 turned out to be the worst economic crisis since the 1930s. It prompted enormous economic stimulus packages and a new discussion about financial regulation that soon disappeared. The aftermath of the crisis poses serious economic, social, and political challenges. Many European states are facing prolonged fiscal and structural problems and, for the first time, the EURO-zone is dramatically challenged. It is argued that the financial crisis transformed into a crisis of the EURO and of the European Union. In a larger perspective - and boosted by the European immigration crisis of 2015 - also the BREXIT might be considered a result of the unresolved issues of the Financial Crisis 2007 and following.

The course will focus on two themes and how they impact on politics, companies, and society: (1.) financial crises and (2.) the political economy of Europe today. The latest financial crisis and its origins will be analysed and possible prospects of the European Union and the EURO-zone will be discussed. The focus is on political strategies (including BREXIT) and on the political risk that companies are exposed to. The discussion will be based on theoretical explanations of financial crises, on comparative historical analyses of past crises and the development of the international monetary system and financial globalization.

(1.) Financial and economic crisis are not singular events. The recent financial crisis will be compared with the Great Depression (1929-33) and its aftermath. Policy makers claimed to have learned from the Great Depression and interpretations of the Great Depression were used to design anti-crisis policies. A comparative analysis of crises and of responses to crises on the national and international level shows that some lessons have been learned, while others have not been taken.

(2.) Many argue that the European economic problems of today have their origin in the financial crisis of 2007/08. While there are good reasons for this view, it might be incomplete. Independent from the financial crisis, the political economy of Europe had created problems that multiplied with the collapse of the financial system. Therefore, changes in the world economy and in dominant ideologies since the 1970s (liberalization, financialization, and globalization) are discussed in relation to the European Union. Concepts from political economy help understand the present situation.

The course will improve the students’ capability to critically analyse economic development, which is necessary for designing corporate or political strategies towards crises. The aims of the course are:

• to help understand financial crises and theoretical explanations of crises,
• to reflect about the rationales of political and corporate responses to crises,
• to expand the students’ knowledge and understanding of international financial and political institutions, and
• to enhance the ability to analyse complex economic processes.

The course will be taught in 15 weeks (2h each). 

tentative literature. Literature on BREXIT is rather fresh and will be added in summer

Books

Amati, Anat / Hellwig, Martin (2014), The Bankers’s New Clothes: What’s Wrong with Banking and What to Do about It, Princeton: Princeton Uuniversity Press (select chapters)

Eichengreen, Barry (2015), The Hall of Mirrors. The Great Depression, the Great Recession, and the Uses – and Misuses – of History, Oxford: Oxford University Press (select chapters)

Rajan, Raghuram G. (2011), Fault Lines. How Hidden Fractures still Threaten the World Economy, Princeton: Princeton University Press (select chapters)

Streeck, Wolfgang (2014), Buying Time: The Delayed Crisis of Democratic Capitalism, London: Verso (select chapters)

Journal articles

Acemoglu, Daron (2009): “The crisis of 2008: Lessons for and from economics”, in: Critical Review 21, no. 2-3, 185-194.

Brunnermeier, Markus (2009): “Deciphering the Liquidity and Credit Crunch 2007–2008”, in: Journal of Economic Perspectives 23, no. 1, 77-100.

Keynes, John M. (1937): “The General Theory of Employment”, in: The Quarterly Journal of Economics 51, no. 2, 209-223.

Minsky, Hyman (1977), “A Theory of Systemic Fragility”, in Bordo, Michael, Financial Crises. Volume 1, Cambridge, Edward Elgar 1992, pp. 45-59. 

Stiglitz, Joseph E. (2009): “The Anatomy of a Murder: Who killed America’s Economy”, in: Critical Review 21, 329-39.