I teach a seminar in the summer semester of 2024 on “The economics of European integration” at the University of Erfurt.
Der Kurs findet als Block in Präsenz statt am
10. Mai: 13-19 Uhr
11. Mai: 9-15 Uhr
7. Juni: 13-19 Uhr
8. Juni 9-15 Uhr
Eine kurze Online Einführung findet am 9. 6. um 18 Uhr statt.
Overview: The Course “European integration, key current debates” is targeted at Bachelor students, typically enrolled in economics/political science programmes and interested in the European Union (EU). The aim of the course is to learn about the key features of European integration, the economic and institutional setting and about the major economic policy developments since the start of the global financial crisis, including the euro area crisis, the pandemic and the green deal. Students will study how to evaluate policy trade-offs and critically assess policy decisions taken. The course will feature presentations by the professor, interactive discussions with students as well as selected lectures by policy makers. Moreover, all students will be required to present on a topic and write a short policy brief.
We will cover major debates on EU economic policies. After an introduction into the history of EU integration, the course will focus on monetary, fiscal and financial policies in the EU. The European Union and the euro area in particular experienced profound economic up- and downturns and even existential crises during 2008-13. We will examine the reasons behind these turbulences, understand political and policy trade-offs and review the role of the European Central Bank and of fiscal authorities in this period.
We will then turn to the quest for a safe asset, the EU’s financial policies and the creation of Europe’s banking union. We will also discover how the pandemic affected the European economy and how EU policy makers responded – and how the announcement of EU debt issuance stabilised the EU economy. Finally, we will cover the European Green deal and its possible implications for the European economy.
The course will put a focus on interactive learning. Every session of 1h30 minutes will be divided into two parts. First, the professor will present an introduction to the issue. In the second half, a group of students is asked to present on a topic. We will also hear from guest lecturers from the policy making world.
Below is a (rough) structure of the 12 sessions, with respective references assigned. In some cases, references will be added. Since this is an interactive seminar with required self-study and student presentations, I require the students working on a specific topic to go well beyond the suggested reading with a proper literature review. I will also in every session review the material of the last session and ask students questions.
Grading will be based on presentation and participation and the policy paper. The policy papers will be due on May 2022 and should be submitted as a single pdf. Policy papers need to be ~10 pages long (4500 – 5000 words) and contain a title, executive summary, introduction with literature review, clear exposition of the policy problem, discussion of possible solutions with clear understanding of pros and cons of each solution, recommendation, conclusion and reference list. The policy notes need to not only be well written but also document an understanding of the European Union, its institutional and governance settings. Moreover, there should be a clear understanding of empirical relevance, for example documented with charts and figures.
- Introduction to the course and an overview on the history of EU integration, institutions, and governance
Reading material:
Baldwin & Wyplosz, chapters 1-3
- The build-up of major imbalances in the euro area 1999-2008
Reading material:
- Baldwin&Wyplosz, Chapter 13, 14, 15
- Blanchard and Giavazzi, 2002
- De Grauwe (2012)
- Efstathiou and Wolff 2019
- Pisani-Ferry, Sapir and Wolff (2011)
- Ruscher and Wolff (2013)
- The crises of 2008-13: from global financial crisis to EU-IMF assistance in the euro area
Reading material:
- Martin & Philippon, 2017.
- Pisani-Ferry, Sapir & Wolff (2013)
- Baldwin & Wyplosz, chapter 19
- Banking Union – the idea, progress and limitations
Reading material:
- Mody, Ashoka, Damiano Sandri, Refet Gürkaynak, 2012
- Gerlach, Schulz and Wolff, 2010
- Véron, Nicolas, 2015
- Demertzis, Maria, Ines Gonzalves Raposo, Pia Hüttl , Guntram Wolff, 2018
- Baldwin & Wyplosz, chapter 19
- Challenges to the European Central Bank – from the debt crisis to Draghi’s “Whatever it takes” and the new strategy review
TBC: ECB guest lecturer
Reading material:
- de Grauwe, Paul (2011)
- Baldwin & Wyplosz, chapter 16
- ECB strategy review documents
- Strengthening Europe’s financial system
Possible student presentation/essay: the role of monetary policy in reducing financial fragmentation
Reading material:
- Véron and Wolff, 2016
- Baldwin & Wyplosz, chapter 18
- To be added
- The difficult search for a euro area safe asset
Reading material:
- Leandro and Zettlemeyer, 2019
- Delpa and von Weizsäcker, 2010
- To be added
- The pandemic in Europe and the response of the ECB, EU member states and EU debt
Reading material
- Chapter 20 of (new version) Baldwin and Wyplosz book
- Balázs Égert, Yvan Guillemette, Fabrice Murtin and David Turner, 2020, Walking the tightrope: avoiding a lockdown while containing the virus, OECD, https://doi.org/10.1787/9cc22d8c-en
- Miquel Oliu-Barton, Bary Pradelski, Nicolas Woloszco, Lionel Guetta-Jeanrenaud, Philippe Aghion, Patrick Artus, Arnaud Fontanet, Philippe Martin, Guntram Wolff, 2022, “The effect of Covid certificates on vaccine uptake, public health and the economy”, https://www.researchsquare.com/article/rs-1242919/v2 .
- Blanchard, The covid economic crisis, additional chapter for his book Macroeconomics, 8th edition.
- Mankiw, The Covid 19 recession of 2020, forthcoming in Macroeconomics 11e
- Sapir, A. (2020) ‘Why has COVID-19 hit different European Union economies so differently?’, Policy Contribution 2020/18, Bruegel
- Fiscal rules – an old reform debate with new impetus from large climate investment needs
TBC: Guest lecturer
Reading material:
- Darvas, Zsolt & Guntram B. Wolff, 2021
- Blanchard, O., A. Leandro and J. Zettelmeyer (2021)
- European Fiscal Board (2020)
- Martin, P, J Pisani-Ferry, X Ragot (2021)
- Baldwin & Wyplosz, chapter 17
- The European Green deal: key elements and difficulties
- EU Commission documents are basic reading
- Introductory chapter of “Macroeconomics of decarbonisation”, Cambridge University Press
- European economic sovereignty: what does it mean?
Reading material:
- Leonard et al (2021)
- Leonard et al (2019)
- Further references to be added
- Brexit and the challenge of differentiated European integration (optional if time still permits)
General literature
Richard Baldwin and Charles Wyplosz, 2019: Economics of European integration, 6th edition
Paul de Grauwe, 2020, Economics of Monetary Union, Oxford University Press, 13th edition
Literature assigned to specific sessions
Blanchard, Olivier and Francesco Giavazzi, 2002, “Current account deficits in the euro area: the end of the Feldstein-Horioko puzzle?” Brookings papers on economic activity, https://www.brookings.edu/wp-content/uploads/2002/06/2002b_bpea_blanchard.pdf
Blanchard, O. and F. Giavazzi (2004) ‘Improving the SGP through a proper accounting of public
Investment’ , Discussion Paper No. 4220, Centre for Economic Policy Research
Blanchard, O., A. Leandro and J. Zettelmeyer (2021) ‘Redesigning the EU Fiscal Rules: From Rules to
Standards’, Economic Policy, forthcoming
Darvas, Zsolt & Guntram B. Wolff, 2021. “A green fiscal pact- climate investment in times of budget consolidation,” Policy Contributions 44540, Bruegel.
Delpa and von Weizsäcker, 2010, The Blue bond proposal, Bruegel https://www.bruegel.org/2010/05/the-blue-bond-proposal/
de Grauwe, Paul (2011) The governance of a fragile eurozone, CEPS working document
De Grauwe, Paul (2012) ‘In Search of Symmetry in the Euro Zone’, Policy Brief No. 268, Centre for European Policy Studies
Demertzis, Maria, Jean Pisani-Ferry, André Sapir, Thomas Wieser, Guntram Wolff, 2018, “One size does not fit all: European integration by differentiation”, Bruegel Policy Brief 3/2018
Demertzis, Maria, Ines Gonzalves Raposo, Pia Hüttl , Guntram Wolff, 2018, “How to provide liquidity to banks after resolution in Europe’s banking union”, Paper written for the European Parliament, November 2018.
Efstathiou and Wolff 2019, What drives national implementation of EU policy recommendations, https://www.bruegel.org/2019/04/what-drives-national-implementation-of-eu-policy-recommendations/
European Fiscal Board, Annual Report 2020, https://ec.europa.eu/info/publications/2020-annual-report-european-fiscal-board_en
European Central Bank, 2021, Strategy review, https://www.ecb.europa.eu/home/search/review/html/index.en.html
European Commission, The green deal (various reports)
Gerlach, Schulz and Wolff, 2010, “Banking and sovereign risk in the euro area”, CEPR DP 7833.
Iara, Anna and Guntram Wolff, (2014) “Rules and risk in the euro area”, European Journal of Political Economy, 34, pp 222–236, 2014. https://doi.org/10.1016/j.ejpoleco.2014.02.002
Känzig, Diego, 2021, “The economic consequences of putting a price on carbon”, London Business School, https://dkaenzig.github.io/diegokaenzig.com/Papers/kaenzig_jmp.pdf
Leandro, Alvaro and Jeromin Zettlemeyer, 2019, “The search for a euro area safe asset”, PIIE working paper, https://www.piie.com/publications/working-papers/search-euro-area-safe-asset
Leonard, Mark & Jean Pisani-Ferry & Elina Ribakova & Jeremy Shapiro & Guntram B. Wolff, 2019. “Redefining Europe’s economic sovereignty,” Policy Contributions 31321, Bruegel.
Leonard, Mark & Jeremy Shapiro & Jean Pisani-Ferry & Simone Tagliapietra & Guntram B. Wolff, 2021. “The geopolitics of the European Green Deal,” Policy Contributions 40941, Bruegel.
Mark Leonard & Jeremy Shapiro & Jean Pisani-Ferry & Simone Tagliapietra & Guntram B. Wolff, 2021, “The EU can’t separate climate policy from foreign policy”, Foreign Affairs, https://www.foreignaffairs.com/articles/europe/2021-02-09/eu-cant-separate-climate-policy-foreign-policy
Martin, Philippe & Thomas Philippon, 2017. “Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone,” American Economic Review, American Economic Association, vol. 107(7), pages 1904-1937, July.
Martin, P, J Pisani-Ferry, X Ragot (2021) “A new template for the European fiscal framework”, VoxEU.org, 26 May
Mody, Ashoka, Damiano Sandri, Refet Gürkaynak, 2012, The eurozone crisis: how banks and sovereigns came to be joined at the hip, Economic Policy, Vol. 27, No. 70 (April 2012), pp. 199, 201-230, https://www.jstor.org/stable/41428853
Pisani-Ferry, Jean, André Sapir and Guntram Wolff (2011) “An evaluation of IMF surveillance of the euro area”, Bruegel Blueprint Volume XIV, 31 October 2011.
Pisani-Ferry, Jean & André Sapir & Guntram B. Wolff, (2013) “EU-IMF assistance to euro area countries- an early assessment,” Blueprints, Bruegel, number 779, December.
Pisani-Ferry, Jean, André Sapir, Nicolas Véron, Guntram Wolff, 2012, “What kind of European Banking Union”, Bruegel Policy Brief
Ruscher, Eric, and Guntram Wolff (2013) “Corporate balance sheet adjustment: stylized facts, causes and consequences”, Review of Economics, vol. 64, pp 1-21 https://usercontent.one/wp/www.guntramwolff.net/wp-content/uploads/2015/03/RuscherWolff13.pdf?media=1711699679
Sapir, André & Guntram B. Wolff, 2013. “The neglected side of banking union- reshaping Europe’s financial system,” Policy Contributions 792, Bruegel.
Tagliapietra, Simone, Guntram Wolff, 2021, “Form a climate club: United States, European Union and China”, Nature https://www.nature.com/articles/d41586-021-00736-2
Tagliapietra, Simone, Guntram Wolff, 2021, “Conditions are ideal for a new climate club”, Energy Policy https://doi.org/10.1016/j.enpol.2021.112527
Véron, Nicolas, 2015. “Europe’s radical banking union,” Essays and Lectures 880, Bruegel.
Véron and Wolff, 2016, “Capital Markets Union: a vision for the long term”, Journal of Financial Regulation, https://academic.oup.com/jfr/article/2/1/130/2357883
