74570 - Europe in The Global Economy

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 is made of two parts. The first (Prof. Manasse) focuses on the macroeconomis tools required to discuss monetary and fiscal policies within the Euro area. The second (Prof. Subacchi) focuses on the design of European Institutions

Part I (prof Manasse)

Topic  1

1. Review of macroeconomic tools (cont.).
2. Monetary and Fiscal Policies in open economies
3. The issue of coordinating policies
4. Global Fiscal Stimulus

Topic 2

1. Fiscal Policy and Accumulation of Debt
2. The dangers of High Debt and Fiscal Rules and Sovereign Debt Crisis
3. Fiscal Constraints in the EMU
4. Fiscal Constraints in US and UK
5. Europe and the others
   1. the US and transatlantic relations
   2. the rise of China
   3. the other BRICs
   4. Japan’s secular stagnation
   5. emerging markets and developing countries

Topic 3

1. Europe on the brink
   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”

Topic 4

1. Europe in the post-crisis years
   1. competitiveness (the real exchange rate) and the intra-EU (and intra-EMU) dynamics
   2. long term GDP growth: secular stagnation or the mediocre normal?
   3. low inflation and deflation: the issue of monetary policy
   4. sluggish domestic demand, high unemployment and the constraints of fiscal policy

Readings/Bibliography

Textbook: O. Blanchard , D.R: Johnson, Macroeconomics, Pearson ed, Chapters  2-7, 19-23.

Suggested readings:
R. Baldwin, Towards an Integrated Europe (London: Centre for European Policy Research, 2004).

Fraser Cameron, The European Union as a Model for Regional Integration, (New York: Council on Foreign Relations Press, 2010).

Ralph Dahrendorf, Why Europe matters. A personal view (London: Centre for European Reform, 1996).

Rudiger Dornbush,Euro fantasies: Common Currency as Panaceaa Foreign Affairs, 75 (5), pp. 110-24.

Mario Draghi, Speech to the Global Investment Conference, London, 26 July 2012.

(The) Economist, Maastricht follies, 9 April 1998.

David Marsh, The euro; the battle for the new global currency (New Haven and London: Yale University Press, 2011, new edition.

Jurgen Stark, german prudence is not to blame for the eurozone,  Financial Times, 12 February 2015.

Global Fiscal Stimulus: IMF article http://www.imf.org/external/pubs/ft/survey /so/2008/INT122908A.htm

Jamil, Anderlini and Lucy Hornby (2014), “China overtakes US as world largest goods trader, in Financial Times, 10 January 2014.

(The) Economist, Europe textile war with China - and itself’, 1 September 2005.

Fredrik, Erixon,  Hosuk Lee-Makiyama, Matthias Bauer and Martina F. Ferracane, Trans-pacific partnership: a challenge to Europe, ECIPE Policy Brief, November 2014.

Paolo Guerrieri and Piero Esposito, 2012, ‘The internationalization of the Italian economy: a lost chance, an opportunity to seize’, Review of economic conditions in Italy, 2012, pp. 55-81.

Daniel S. Hamilton and Joseph P. Quinlan, eds., The Transatlantic Economy 2014. Vol. 1: Headline Trends (Washington DC: Centre for Transatlantic Relations, 2014).

IMF, Competitiveness in the Southern euro area: France, Greece, Italy, Portugal and Spain, Working Paper No.08/112.

Bill Lewis et al., US Productivity Growth, 1995-2000, McKinsey Global Institute, October 2001.

Josh Noble and Gabriel Wildau, Fear of a deflationary spiral, Financial Times, 1 December 2014.

Jim O' Neill, The growth map. Economic opportunity in the BRICs and beyond (London: Portfolio  Penguin, 2011).

Pietra Rivoli, The travels of a T-shirt in the global economy. An economist examines the markets, power and politics of world trade (Hoboken NJ: Wiley, 2005).

Philip, Whyte, Why has the Eurozoneâ₠recovery been weaker than the USà in CER Bulletin, No. 90 (June/ July 2013), pp. 3-4.

Assessment methods

The exam consists of written questions on both parts of the course to be answered in a single session.

A vote of 18/30 as the average of the two parts  is required for passing the exam.

The final vote is automatically registered. Students can withdraw at any time by not handing in the solution, but if they do, the exam will be marked and registered automatically.

 

Links to further information

http://paolomanasse.it

Office hours

See the website of Paolo Luciano Adalberto Manasse

See the website of Paola Subacchi