Economic and Monetary Union (EMU)

Philipp Kirchner and Benjamin Schwanebeck

Winter Term 2016/17

Outline and syllabus

Economic and Monetary Union Kirchner/Schwanebeck

Who are we?

Chair for Money, Credit and Currency – Prof. Dr. Jochen Michaelis

What are we interested in / what do we actually do?

• Research in macroeconomics with focus on monetary economics

• Impact of monetary policy on the business cycle

• Macroeconomic modeling with an emphasis on DSGE models

• Labor market questions

What do we offer?

• Basic bachelor courses in macroeconomics (VWL 2 – Makroökonomik)

• Advanced courses on monetary economics

• Theory and politics of monetary policy (Geldtheorie und –politik)

• Selected topics in monetary policy (Ausgewählte Fragen der GP)

• International macroeconomics (Internationale Makroökonomie)

• Bachelor/ Master thesis

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Time and location

Time: Thursday, 8:00 – 12:00h

Location: Nora-Platiel 6, Room 0211

Examination Regulations:

M.A. Wirtschaftswissenschaften (Master-PO 2007) : SP 4, SP 6, Masterprofil 1

M.Sc. Business Studies (Master-PO 2012): Modul FACT 3 - VWL

M.Sc. Business Studies (Master-PO 2013): Modul VWL-FACT-B1

M.Sc. Economic Behaviour and Governance (Master-PO 2012, 2013): Modul 3, Modul 6

Prerequisites:

Good knowledge of VWL I + II + III, some course of monetary economics

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Structure of the course

The course is divided into two parts:

1. Lecture part: 27th October 2016 – 08th December 2016

• Midterm exam: 15th December 2016

2. Seminar part: 22nd December, 2016 – 9th February 2017

• Due date seminar paper: 3rd March, 2017

Credits and requirements:

• Attendance and active oral participation

• Midterm exam, 60 minutes

• Seminar paper (see topics below), 15 pages • Send two preferred topics (indicating first and second priority) to schwanebeck@uni-

kassel.de within one week. Allocation of topics is based on these preferences and on a first-

come-first-serve basis.

• Presentation of seminar paper + discussion, 45 minutes • Slides have to be handed in Mondays before the presentation day

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Please note: Binding registration in HIS until 1.11.16 for the seminar and 10.12.2016

(five days before the exam) for the lecture. A later cancellation is not possible.

Contact:

• Benjamin Schwanebeck: schwanebeck@uni-kassel.de

Office hours: by appointment, Room 3208b, Nora-Platiel-Straße 4

• Philipp Kirchner: p.kirchner@uni-kassel.de

Office hours: by appointment, Room 3207, Nora-Platiel-Straße 4

• Andreas Hanl: hanl@uni-kassel.de

Further information on the course:

http://www.uni-kassel.de/fb07/institute/ivwl/faculty-chairs/michaelis-prof-dr/lehre/seminar-economic-

and-monetary-union-emu.html

Further information on how to write a seminar paper:

http://www.uni-kassel.de/fb07/fileadmin/datas/fb07/5-

Institute/IVWL/Michaelis/Lehre/11/Formal_configuration_seminar_paper_-_BA__-_MA_01.pdf

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Overview of the content

This course is supposed to …

• … give an introduction into the core economic concepts of “Economic and

Monetary Unions”

• … point out the implications of integration for fiscal policy and monetary policy

• … provide an overview of important theoretical/empirical findings regarding EMU

• … discuss current issues regarding EMU (with emphasis on EMU in Europe)

Above that, we put emphasis on…

• … recent topics in economics (Financial crisis 07/08, Refugee debate, BREXIT)

• … recent research topics in the field of monetary economics

• … providing you with further skills in working scientifically

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Topics and Literature:

1. Cost and Benefits of Monetary Unions (Benjamin Schwanebeck)

• Beetsma, Roel and Massimo Giuliodori (2010): “The Macroeconomic Costs and

Benefits of the EMU and Other Monetary Unions: An Overview of Recent

Research”, Journal of Economic Literature 48 (3): 603-641.

2. Is the Euro Area an Optimal Currency Area? (Benjamin Schwanebeck)

• Dellas, Harris, and George Tavlas (2009): “An optimum-currency-area odyssey”,

Journal of International Money and Finance 28: 1117-1137.

• Vieira, Carlos and Isabel Vieira (2012): “Assessing the Endogeneity of OCA

Conditions in EMU”, The Manchester School 80 (9): 77-91.

3. The Economics of Product Market Integration (B. Schwanebeck)

• Pelkmans, Jacques (2001): European Integration: Methods and Economic

Analysis, 2nd ed., Harlow.

• Griffith, Rachel, Rupert Harrison and Helen Simpson (2010): “Product Market

Reform and Innovation in the EU”, Scandinavian Journal of Economics 112 (2):

389–415.

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Topics and Literature:

4. The impact of the Euro on Trade (Andreas Hanl)

• Baldwin, Richard, Virginia DiNino, Lionel Fontagné, Robert De Santis and Daria

Taglioni (2008): Study on the Impact of the Euro on Trade and Foreign Direct

Investment, European Economy - Economic Papers 321, Chapter 2.

5. Monetary and Fiscal Policy in a Heterogeneous Currency Union (A. Hanl)

• Gali, Jordi and Tommaso Monacelli (2008): “Optimal monetary and fiscal policy

in a currency union”, Journal of International Economics 76 (1): 116-132.

6. Monetary Policy and the Zero Lower Bound (A. Hanl)

• Buiter, Willem (2010): “Negative nominal interest rates: Three ways to overcome

the zero lower bound”, North American Journal of Economics and Finance 20:

213-238.

7. The Stability and Growth Pact and the Fiscal Compact (A. Hanl)

• Roel Beetsma and Harald Uhlig (1999): An Analysis of the Stability and Growth

Pact, in: The Economic Journal Volume 109, Issue 458, pages 546–571, October

1999.

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Topics and Literature:

8. The European Sovereign Debt Crisis (B. Schwanebeck)

• Lane, Philip (2012): “The European Sovereign Debt Crisis“, Journal of Economic

Perspectives 26 (3): 49-68.

9. The Greek Tragedy (Philipp Kirchner)

• Sinn, Hans-Werner (2015): The Greek Tragedy, CESifo Forum Special Issue,

June 2015.

10. Monetary Policy and Housing Markets – The Case of Spain (P. Kirchner)

• Conefrey, Thomas, and John Fitz Gerald (2010): Managing Housing Bubbles in

Regional Economies under EMU: Ireland and Spain, National Institute Economic

Review No. 211.

11. Monetary Policy and Housing Markets – The Case of Ireland (P. Kirchner)

• Conefrey, Thomas, and John Fitz Gerald (2010): Managing Housing Bubbles in

Regional Economies under EMU: Ireland and Spain, National Institute Economic

Review No. 211.

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Topics and Literature:

12. Unconventional Monetary Policy Measures (P. Kirchner)

• Fawley, Brett and Christopher Neely (2013): “Four Stories of Quantitative

Easing”, Federal Reserve Bank of St. Louis Review 95 (1): 51-88.

13. Shadow Banking in the Euro Area (P. Kirchner)

• ECB (2016): Shadow Banking in the Euro Area: Risks and Vulnerabilities in the

Investment Fund Sector, ECB Occasional Paper Series; No. 174.

14. Financial Stability and Macroprudential policy (P. Kirchner)

• Cecchetti, Stephen (2015): The Road to Financial Stability: Capital Regulation,

Liquidity Regulation and Resolution, International Journal of Central Banking 11

(3): 127-139.

• Bank of England (2009): The role of Macroprudential Policy, BoE Discussion

Paper Series, November 2009.

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Topics and Literature:

15. Contagion in Economic and Monetary Unions (P. Kirchner)

• Constancio, Vitor (2012): Contagion and the European Debt Crisis, Banque de

France Financial Stability Review No. 16, April 2012.

16. Sudden Stops in EMU (B. Schwanebeck)

• Gros, Daniel and Cinzia Alcidi (2013): Country adjustment to a ‘sudden stop’:

Does the euro make a difference?, International Economics and Economic Policy

12 (1): 5-20.

17. Current Account Imbalances in EMU (B. Schwanebeck)

• Zemanek, Holger, Ansgar Belke and Gunther Schnabl (2010): “Current account

balances and structural adjustment in the euro area, International Economics and

Economic Policy 7(1): 83-127.

18. Target2 (B. Schwanebeck)

• Sinn, Hans-Werner and Timo Wollmershäuser (2012): “Target loans, current

account balances and capital flows: the ECB’s rescue facility”, International Tax

and Public Finance 19 (4): 468-508.

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Economic and Monetary Union Kirchner/Schwanebeck

Outline and syllabus

Topics and Literature:

19. The Economic Implications of Brexit (P. Kirchner)

• Alfano, Marco, Christian Dustmann and Tommaso Frattini (2016): Immigration

and the UK: Reflections after Brexit, CReAM Discussion Paper Series CPD

23/16.

• OECD (2016): The Economic Consequences of Brexit: a taxing decision, OECD

Economic Policy Paper No. 16, April 2016.

20. The Economics and Politics of Refugee Migration (B. Schwanebeck)

• Dustmann, Christian et al. (2016): On the Economics and Politics of Refugee

Migration, CReAM Discussion Paper Series, CPD 16/16.

21. Immigration inside the European Union (B. Schwanebeck)

• Dustmann, Christian and Tommaso Frattini (2011): Immigration: The European

Experience, CReAM Discussion Paper Series CPD 22/11.

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