5 Lesson 5: European Monetary Integration
5.1 Theory of the Monetary Integration. 5.2 What Have we Learnt about Monetary Integration since the Maastricht Treaty? 5.3 Monetary policy and Challenges 5.4 The change in the EU institutional cycle. Past shocks and new priorities
Monday 2 October 2023
Fleming-Corden analysis of monetary policy with the fixed exchange rate and the critical current view of Degrauwe’s point of view is introduced through his papers of 2006 What Have We Learnt about Monetary Integration since the Maastricht Treaty?
The change in the EU institutional cycle. Past shocks and new priorities by Pilar L’Hotellerie-Fallois
Compulsory readings
5.1 Theory of the Monetary Integration
5.1 Theory of the Monetary Integration (Slides Carlos San Juan)
5.2 What Have We Learnt about Monetary Integration since the Maastricht Treaty?
5.2 What Have we Learnt about Monetary Integration since the Maastricht Treaty? (Slides Carlos San Juan)
The critical assessment of Paul Degrauwe’s point of view is introduced through his papers of 2006 What Have We Learnt about Monetary Integration since the Maastricht Treaty? JCMS 2006 Volume 44. Number 4. pp. 711–30 and a second paper by Paul Degrauwe and Yuemei Ji, Social Europe Journal 25/02/2013
Panic-driven Austerity In The Eurozone and its Implications, which present critical views about the EMU policy in recent times.]
5.3 Monetary Policy and Challenges 2023
Rafael Quevedo. BCE. Monetary Policy and Challenges 2023.
5.4 The change in the EU institutional cycle. Past shocks and new priorities by Pilar L’Hotellerie-Fallois. 2023.
(downloadable below)
Complementary readings
See also
Video
Attached documents
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Lesson 5.1 Theory of the Monetary Integration (PDF - 256.1 kb)The model of monetary policy with fixed exchange rate, is a proxy for the eurozone. The analysis of Fleming-Corden assumes that there are 3 countries involved: H (host country), P (potential partner country), W (rest of the world) In order to maintain internal and external equilibrium, H needs to devalue its currency relative to W, P needs to revalue its currency relative to W However, if they are in an exchange-rate union, H and P must devalue or revalue their currency together If countries deprive themselves of rates of exchange as policy instruments, they impose on themselves losses that are essentially losses emanating from enforced departure from internal balance.
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a) Monetary policy in the EMU: The Commission’s view b) Mundell I and Mundell II c) Panic driven austerity: the ECB versus the FED
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L-5.2 pdf What Have we Learnt about Monetary Integration. Prof. Carlos San Juan Mesonada, (PDF - 1.4 Mb)pdf presentation L-5.2. What Have we Learnt about Monetary Integration.
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I. Introduction: the change in the EU institutional cycle
II. The VDL Commission priorities 2019-2024
III. Three shocks: impact and policy response
1.The Pandemic
2. The war in Ukraine and the energy crisis
3. The IRA
IV. Identifying challenges and pritorities for the new EU institutional cycle 2024-2029
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