European Economic Integration

Econ 461 Spring 2007     Professor Stanley Black

This course deals with economic and political aspects of European economic integration, the EU customs union, barriers to integration, the single European market, the common currency, enlargement of the EU, and related topics.

Section I: 
Time: 12:30-1:45 pm 
Days: TTh 

Office Hours: 
Professor Black: 
 Wed 2-3:30:pm 
Office: Gardner 200C

Prerequisites: 
Economics 101 or permission of instructor

Textbook: Baldwin & Wyplosz The Economics of European Integration, 2nd Ed.

Supplementary Readings: Jacquemin & Sapir, The European Internal Market; Molle, The Economics of European Integration; De Grauwe, Economics of Monetary Union (all on reserve) 

Periodicals: The Economist, Financial Times, Economic Policy, Der Spiegel       Weblinks 

 Flac Section

Requirements: A 10-15 page paper, due Mar 29 (25%) Topic to be approved by Feb 27.  Mid-term Exam Feb 20 (25%) Final Exam (50%)

             I.        Concepts, History, and Institutions

1.        Concepts - Molle, Ch. 1-2 Notes

2.        History - B&W, Ch. 1 

3.        Facts, Law, Institutions and the Budget - B&W, Ch. 2

4.        Decision Making -B&W, Ch. 3

          II.      The Microeconomics of European Integration

5.        International Trade and Trade Policy - B&W, Ch. 4  MD-MS_diagram_explained

6.        The Economics of Preferential Liberalization - B&W, Ch. 5, Mayes, “The Effect of Economic Integration on Trade,” in Jacquemin & Sapir, Ch. 5. PTA_diagram_explained   Trade in Goods and Services  Single Market

7.        Market Size and Scale Economies - B&W, Ch. 6, Muller & Owen, “The Effect of Trade on Plant Size,” in Jacquemin & Sapir, Ch. 8

8.        Growth Effects and Factor Market Integration - B&W, Ch. 7

9.        Economic Integration, Labor Markets, and Migration - B&W, Ch. 8, Layard, Nickell & Jackman, The Unemployment Crisis

       III.      EU Policies

10.     The Common Agricultural Policy - B&W, Ch. 9

11.     Location Effects, Economic Geography and Regional Policy - B&W, Ch. 10

12.     EU Competition and State Aid Policy – B&W, Ch. 11

13.     EU Trade Policy – B&W, Ch. 12

        IV.      The Macroeconomics of European Integration

14.     European Monetary History - B&W, Ch. 13

15.     Choice of Exchange Rate Regime – B&W, Ch. 14

16.     The European Monetary System - B&W, Ch. 15

17.     Optimum Currency Areas - B&W, Ch. 16, DeGrauwe, Ch. 1-2

18.     The European Monetary Union - B&W, Ch. 17

19.     Fiscal Policy and The Stability Pact - B&W, Ch. 18

20.     The Financial Markets and the euro – B&W, Ch. 19