74570 - Europe in The Global Economy

Course Unit Page


This teaching activity contributes to the achievement of the Sustainable Development Goals of the UN 2030 Agenda.

Decent work and economic growth Reduced inequalities Peace, justice and strong institutions

Academic Year 2018/2019

Learning outcomes

The course offers a series of advanced analytical tools to understand European economic development as well as economic policies related to EU integration and enlargement, their political and economic prerequisites and their impact on member states. At the end of the course, students will be able to use models of political economy, institutional economics and economic analysis in order to critically evaluate the process of economic integration in Europe in the trade, monetary and financial areas.

Course contents

The course focuses on Europe’s model of economic integration and explores how this model responds to the challenges of a competitive global market place. During the course we will examine topical themes such as the impact of the financial crisis (2009-2012) on the long-term stability in the euro area, the post-Brexit trade arrangements and the role of the EU in bilateral trade agreements.

While it is not compulsory, it is advised that students will have previously taken International Economics Advanced (78980), so to make themselves familiar with the main concepts and analytical tools in the theory and practice of international trade, exchange rates and international capital movements.

They should also consider taking Europe in World Politics (74571) in order to learn about the historical evolution of the EU and its interaction with other regional organizations (Mercosur, African Union, ASEAN).

The course is taught in English and is arranged in two modules.

Module I Prof. Paolo Manasse

Week 1

  • Basic Definitions, National Accounts;
  • Fiscal Accounts, Fiscal Policy and Accumulation of Debt
  • A Tour of the World : Europe and the others
  1. a. the US and transatlantic relations
  2. b. the rise of China
  3. c. the other BRICs
  4. d. Japan’s secular stagnation
  5. e. emerging markets and developing countries

Week 2

  • Standard Model : Closed Economy
  • Goods Market
  • Money Market
  • Equilibrium , Monetary and Fiscal Policy (IS-LM)


  • Open Economy
  • Balance of Payments,
  • Purchasing Power Parity, Covered and Uncovered Interest Parity

Week 4

  • Fixed and Flexible Exchange Rate, The Euro
  1. The global financial crisis
  2. the impact on Europe
  3. from a banking crisis to a sovereign debt crisis
  4. backstopping the system: the role of the ECB
  5. the issue of coordinating policies
  6. Mario Draghi and “whatever it takes”

Module II Prof. Paola Subacchi

This module focuses on both the theory and the empirical analysis of Europe’s economic integration. Students will acquire the analytical tools that are necessary to critically assess recent events and follow the current debate on Europe’s economic future.


Module I

Chapters in Blanchard , Johnson, Macroeconomics , Pearson ed. 3,4,5,18,19,20,21.

Chapters (or Slides) in Blanchard, Amighini, Giavazzi, Il Mulino: 2,11,21

Module II

The following book will be used for Module II. However, this does not include all the material covered in lectures and classwork. A full reading list will be available at the beginning of the course and other material used in class will be made available afterwards.

Richard Baldwin, The Economics of European Integration (London: McGraw Hill Education, fifth edition, 2015), chapters 1-8.

Teaching methods

The course is taught in English and is organised in two modules.

Teaching will be structured around frontal lectures, classroom presentations and home assignments of short papers and/or reading.

Class attendance is strongly recommended.

Assessment methods

Exams are held during the main exam periods (June, July, September and February).

The exam consists of two or three open-ended questions for each module, to be answered in a single session (1 hour for each module).

A vote of at least 18/30 in each module is required for passing the exam.

The final vote is automatically registered. Students can withdraw at any time during the exam session, but if they hand in the exam paper, this will be marked and the grade will be registered automatically.

Teaching tools

We will be using PowerPoint presentations and other material for lectures and classwork. This material will be available on iol.unibo.it.

Office hours

See the website of Paola Subacchi

See the website of Paolo Luciano Adalberto Manasse