82005 - Economics of the EU

Learning outcomes

The course is an introduction to the ECONOMICS and POLITICAL ECONOMY of the European Union.

Students are expected to analyze and discuss at an advanced level:

• the economic, political and institutional prerequisites of EU integration and enlargement
• the consequences that integration and enlargement have on member states
• the specific patterns that have characterized the integration process in the two areas of the internal market and euro adoption, and the most important debates that have accompanied these processes
• the political implications of economic integration in these areas.

Hence, students will become familiar with concepts and models of economics and political economy that are especially useful for understanding and evaluating these processes and the policies that accompany them.

A considerable part of the course is dedicated to the institutional and policies innovations adopted since 2008, during the Great Recession, and to the current challenges to and debates on the future of European integration.

The course will not cover in any detail issues related to EU competition and trade policies, as other courses in the curriculum deal extensively with these topics.

Course contents

1. What is the EU? Why is it this way?
   • Facts and debates on European integration
   • Economic and political theories about economic integration
   • Deepening versus widening?
   • Powers in the EU: Who does what?
   • Powers in the EU: EU vs. MS - Subsidiarity in practice
2. Globalization, Growth and the State: Europe's place
   • Growth and its long-run drivers. Growth failures
   • The role of the state and the institutionalization of innovation
   • Globalization and growth
   • Globalization and global value chains: When the economy is larger than the state
3. Integration as a Process: The Internal Market
   • Objectives
   • Steps to the Internal Market
   • Why did convergence stop?
   • What is left to be done?
4. Complementing the IM
   • The EU budget
   • Regional Policies and Structural Funds
   • Cohesion, Social Models and Labor Markets
5. The Economic and Monetary Union
   • Objectives and debates
   • Steps towards EMU
   • The single monetary policy: set up and initial outcomes
   • Fiscal policies: set up and initial outcomes
   • Convergence criteria: theory, practice and outcomes
   • Derogation and opting out
6. Suffering and managing the Great Recession:
   • Towards the Recession: The financial crisis
   • The GR and policy responses: USA and EA compared
   • Policy responses: Innovations in the single MP from 2008 to 2016.
   • Policy responses: The new institutional framework of fiscal policies for the EA
   • Why so bad for the periphery? The Debates on Austerity and on Convergence
7. New challenges
   • Migration and Europe’s four freedoms
   • Lessons from the British referendum.
   • What’s next?

Appendix 1.1: How to write a course essay

Appendix 1.2: Where to get data and references

Appendix 2.1: Growth rates

Appendix 3.1: What is productivity?

Appendix 3.2: Taxes and the labor market

Appendix 5.1: A review of stabilization policies

Appendix 5.2: Criteria for choosing fixed exchange rates

Appendix 5.3: Debt sustainability and fiscal discipline. Defaults and bailouts

Readings/Bibliography

Lecture notes and other required readings and documents are collected in the dedicated Dropbox directory.

Students will also be encouraged to consult selected chapters from two useful textbooks:

• Baldwin, Richard and Wyplosz, Charles (2015) The Economics of European Integration. McGraw Hill, 5/e.
• De Grauwe, Paul (2016) Economics of Monetary Union. Oxford UP, 11/e.

Teaching methods

Lecture notes are available for downloading.

Lectures will be supported by PC-based presentations, based on the lecture notes files.

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, research papers and policy debates relevant to the issues covered by the course.

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

Assessment methods

To benefit from the interactive structure of the course, students are strongly invited to attend all lectures.

FOR STUDENTS ATTENDING CLASS ("Studenti frequentanti"), the final mark is the sum of three independent evaluations.

• Intermediate written exam (max 12 points)
• Final written exam (max 12 points)
• Final essay or class presentation (max 9 points)

If points are equal to 31 or more, the final mark is 30 e lode.

Intermediate and final exams require short answers (max. 250 words) to 4 open questions (out of 5).

• Minimum points to be valid: 6.
• Exams will be performed on a PC.
• If one exam is missed (exclusively for grave reasons, to be authorized explicitly), it will have to be taken in the first “appello d’esami” in June.

The final essay is no more than 5000 words long (excluding Tables, Graphs, references). Alternatively, it may be substituted by a class presentation (.pptx, .pdf or prezi) of about 15 slides, to be delivered in 15'-20'.

• In either case, the topic must be explicitly agreed with the instructor before the end of the lectures.
• The essay or presentation file must be delivered by e-mail on the day scheduled for class presentations.
• The last one or two days of lectures will be reserved for students presentations and their discussions. Attendence is compulsory.

Students who do not deliver in time the final essay or presentation will take an additional written exam requiring answers to 4 out of 5 questions. This additional exam will have to be taken in the first “appello d’esami” in June.

STUDENTS NOT ATTENDING CLASS ("Studenti non frequentanti"), or those who missed the intermediate and/or final written exams, will take a single written exam in any regular exam session (prova totale).

• The exam will require short answers (max 250 words) to 12 (out of 15) open questions, set in reference to the texts and documents included in the reading list.

Teaching tools

Detailed lecture notes cover the whole outline of the course. They will be available on a Dropbox directory that will be shared with students (The Internet address will be given during the first class).

Lecture notes will provide the basis for class presentations and discussions.

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

Office hours

See the website of Riccardo Rovelli