|TITLE||Economic and Financial Issues in the Euro Zone|
|LEVEL||05 - Postgraduate Modular Diploma or Degree Course|
|DESCRIPTION||In the first part of this study-unit, the effects of the single currency on economic policy making in the EU will be discussed. The theoretical framework for economic and monetary integration, including costs and benefits of monetary integration and the theory of optimum currency areas will be reviewed, together with an overview of the history of economic and monetary integration in Europe. The framework for monetary policy and economic and fiscal governance in the Euro Zone will be analysed, together with the debate on the future of the single currency.
The second part of this study-unit will focus on the financial aspect of the monetary union. The introduction of the Euro has transformed the European Financial System. It is important to understand financial markets, financial infrastructure and financial institutions in the European context. With the recent financial crisis that evolved into a sovereign debt crisis, it is even more important to understand the fundamentals of finance which are needed in order to be able to develop a critical analysis of financial operations and regulation. This study-unit will try to relate the theory with the latest developments. This is important in order to keep up to date with the latest developments in this important policy area.
The first part of this study-unit aims to provide students with the theory of economic and monetary integration and to describe the manner in which this integration has been implemented in order to achieve a single currency area in the EU. The goal is to enable students to assess the policy implications of fiscal and monetary integration in the EU from a theoretical perspective. Furthermore, students will be able to understand the policy debates on fiscal and monetary policy in the EU.
The second part of this study-unit aims at providing the student with a basic understanding of European financial markets, including the market players, infrastructure, and regulation. It will also review historical developments and provide a detailed review of the latest developments, notably those taken as a result of the 2008/09 financial crisis and the subsequent sovereign debt crisis. This study unit will also analyse how financial markets are being regulated in Europe and provide an analysis of the European financial system. Combining theory, empirical data and policy, it examines and explains financial markets, financial infrastructures, financial institutions, and challenges in the domain of financial supervision with a particular emphasis on the European context.
1. Knowledge & Understanding:
By the end of the study-unit the student will be able to:
- define and discuss the theories of single currency areas and apply them to the European context;
- define and evaluate the main elements of monetary integration and fiscal policy coordination in the Euro Area;
- assess proposals for reforms to economic governance in the Euro Area;
- understand and discuss the causes of the 2008/09 financial crisis;
- understand and discuss the how financial markets and institutions are regulated and supervised in the EU;
- understand and discuss the main elements of the EU banking union and the role of the ECB;
- understand and discuss the importance of financial stability;
- understand and discuss the main theories related to financial integration.
By the end of the study-unit the student will be able to:
- have an improved understanding of fiscal and monetary integration within the EU context;
- explain the implications of participation in the Euro Area on national economic policy making;
- analyse the debate on economic governance in the Euro Area, with improved economic tools;
- be able to understand and interpret a number of metrics related to financial stability, financial integration;
- be able to interpret the behaviour of financial markets and financial players in response to a number of policy decisions and market conditions;
- be able to identify sources of information needed to understand the behaviour of financial markets in the EU.
Main Text/s and any supplementary readings:
- Economics of Monetary Union, Paul De Grauwe, Oxford University Press.
- European Financial Markets and Institutions, Jakob de Haan, Sander Osterloo, Dirk Schoenmaker, 2nd edition, Cambridge University Press, 2012.
- Economic and Monetary Union in Europe: theory, evidence and practice by M. Baimbridge & P. Whyman, Edward Elgar Publishing, 2003.
- Europe and the Euro (2010) / edited by A. Alesina & F. Giavazzi, University of Chicago Press.
- The new European financial market place (1992) / [edited by] Alfred Steinherr.
- The Euro : a challenge and opportunity for financial markets (2000) / edited by Michael Artis, Axel Weber and Elizabeth Hennessy.
- Financial intermediation in the New Europe : banks, markets and regulation in EU accession countries (2004) edited by Donato Masciandaro.
- The Euro and European financial markets by Robert McCauley and William White (BIS Working Paper no41 1997).
- Handbook of European Financial Markets and Institutions (2008) Edited by Xavier Freixas, Philipp Hartmann and Colin Mayer.
A number of additional academic articles related to each topic will be provided to students to reflect the latest advances on the topic as published in the literature.
|ADDITIONAL NOTES||Failure in submitting the Seminar Paper or an unjustified absence in the Examination will result in an overall fail.|
|METHOD OF ASSESSMENT||
Robert M. Suban
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It should be noted that all the information in the study-unit description above applies to the academic year 2019/0, if study-unit is available during this academic year, and may be subject to change in subsequent years.