European Macroeconomic Policy

Note: As of the winter semester 2020/2021, this subject will no longer be offered by the Chair of Monetary Policy and International Economics.

Language

This course is taught in English

Dates

Tuesdays, 10-12 a.m., Room 413

ECTS

5 ECTS

Materials

All contents are available on the WueCampus website.

The lecture provides an overview of the European macroeconomic policy framework, which is essential for a deeper understanding of the current crisis in the Eurozone and the discussion about the future of European Integration. The lecture starts with the history of European Integration, whereby the focus lies on economic- and monetary integration. Next, we discuss the institutional framework of the European Monetary System (1979-1998), which laid the foundation for the single currency. The procedures and criteria for membership in the European Monetary Union (EMU) are presented, as well as the basic framework of the European Central Bank and the main elements of its monetary policy. On this basis the pros and cons of monetary union are analyzed in detail. This includes the traditional analysis of “optimum currency areas” within the Mundell-Fleming model, but also within a simple New Keynesian setting. From this we come to the problems of fiscal policy co-ordination and discipline in the EMU, which is addressed by institution like the Stability and Growth pact. Current macroeconomic developments in the Eurozone, as well as the causes and consequences of the Euro Crisis are playing an ongoing role in the course.