32125 - EU Economics

Learning outcomes

The course provides an in-depth introduction to the study of the ECONOMICS and POLITICAL ECONOMY of the European Union.  

Some questions are especially relevant to this study. They are the background questions throughout all the lectures. Hence they should always be kept in mind:

1) EU member countries have given some powers (how much power? too much or too little?) to the EU in many fields, including many aspects of economic policy.

·     Why?

·     Was it a good choice?  Could it have been done better?

2) How does the EU exercise these powers?

·    Which are the EU objectives and agenda?

·    How are the economically relevant decisions taken? Whose responsibility it is in each case?

·    Have powers been appropriately assigned to the different EU institutions? Are these  powers well balanced in respect of the tasks assigned to the EU, especially in the economic field?

·    Does the EU have appropriate instruments to take and implement its decisions, or not enough, or too many?

·     Is there a democratic deficit in the EU?

3) Which have been the EU main achievements in the economic field so far?

·    Have there been only successes? Obviously not. So, in which fields or actions has the EU achieved success, and where has it failed, and why?

·    Are the economies of the member countries better off because of the EU, or not really?

o     Who benefits more, and why? Are there lessons in this for those who benefit less?

o     Should entering the EU be a goal for non-member European countries? Under what conditions? And should adoption of the euro be a goal for those members that have not adopted it yet? Under what conditions?

4) More specifically, how have the EU institutions and decisions fared since the crisis of 2008-2012?

·    Has the crisis been well managed? In all dimensions?

·    Why are the outcomes of the crisis so heavily unbalanced between the member countries? Whose responsibility is that? Which normative lessons can we draw from this?

·    The crisis has exposed several institutional and policy weaknesses. Which are these? Have they been successfully solved, or is the EU in the process of doing so? And how?

·     In particular, the crisis seem to have highlighted an “inconsistent triangle”, between stability, austerity, and growth. Can it be solved?

On each of these points, we cannot expect to find a response or a solution that will always and easily be shared among everybody. There are many controversies and debates on each of these issues. 

These debates are important!

o          I will try to present and motivate alternative opinions, and encourage the students to do the same. It is the purpose of this course to help you to form and motivate your opinions in an informed and well structured way

·      In general, when evaluating these debates we should be aware of the political economy of the EU.

·      In the (real) world of political economy everything is shaped by the powerful combination of the interests and ideas of the relevant actors, under the constraints of available resources and technologies, and their decisions are often subject to the incompleteness and uncertainty of available information.

·      In this world, there are no benevolent, fully informed planners. It does not help much to consider the EU as if it were governed by such an imaginary ruler.

Course contents

Part I:

Integration. Motives and Theories; Environment and Process

1. What is the EU? Why is it this way?
2. Globalization and Europe's place
3. Integration as a Process:

• Objectives and steps
• Attribution of powers
• Outcomes
  
• Open questions

Part II:

Economic Governance and Policies

1. The Budget
2. Regional Policies and Structural Funds
3. Cohesion, Social Models and Labor Markets
4. Macro Stabilization Policies and their Institutional Setup (A review)
5. Financial Crisis: Origins and Globalization
6. Why a Single Money? MP in the EA up to the Crisis
   
7. Decentralized Fiscal Policy, Sustainability and Discipline
8. Enlargement, Convergence and Euro Adoption
9. The Great Recession: Reforms and Policies int the USA and in the EU
10. The Debate on Austerity. Why do Different Countries Respond so Differently?
11. Have all the Lessons been Learned?
    

 

Readings/Bibliography

A detailed list of required readings will be given during the first lecture.

Lecture notes and most required readings  (all in English) will be posted in a shared Dropbox directory.

A useful but in parts outdated textbook is: Baldwin, Richard and Wyplosz, Charles (2012)  The Economics of European Integration . McGraw Hill, 4/e.

Teaching methods

Lectures will be supported by PC-based presentations.

Students are advised to download and read these presentations (and possibly the related readings) before lectures.

Emphasis will be placed on the use of Internet sources to access information and policy debates relevant to the course.

Students are encouraged to take an active part in many class discussions.

Assessment methods

Students are strongly advised to attend all lectures.

The final mark will be based:

• for 2/3 (22 points) on a written final exam, to be taken before the end of May
• for 1/3 (11 points)  on a final essay.

Written exam : requires short answers (max. 300 words) to 8 open questions (out of 10).

The final essay is no more than 5000 words long (that is, up to about 10 pages font Calibri 12 or equivalent, single spaced, plus References Tables). It may be written in Italian or in English.

The topic of the essay must be agreed with the instructor well before the end of the lectures

Students not attending lectures   ( non frequentanti ) or who have missed the intermediate tests or have not delivered in time the final essay will take a single written test in a regular exam session. The test will require short answers (max 300 words) to 13 (out of 15) open questions, set in reference to the texts and documents included in the reading list.

Teaching tools

Lectures will be supported by PC-based presentations.

Presentations and most required readings will be available from a shared Dropbox directory (login password required).

Please note that, although lectures will be delivered in Italian, all the written material are in English.

Office hours

See the website of Riccardo Rovelli