Macroeconomic Seminar WS 16/17 Monetary and Fiscal Policy in Europe

Transcription

1 Macroeconomic Seminar WS 16/17 Monetary and Fiscal Bernd Hayo Professor of Macroeconomics

2 Introduction Europe is characterised by a unique combination of macroeconomic policies. On the one hand, monetary policy is centrally conducted by the ECB. On the other hand, fiscal policy remains primarily in the hands of national governments. In this seminar, we will analyse different aspects of this constellation from the perspective of both, economic theory and policy, also taking into account the recent financial, economic and debt crises. As research methods, theoretical and empirical approaches can be followed. 2

3 Organisation Allocation of topics: Topics will be allocated on 14 July 2016, a.m. in AA 00/0110 (former AA1, ground floor, Universitätsstr. 24). Preference will be given to those students who turn up on that day. Time and place of actual seminar: Friday 14-16, AA 00/0110 (Universitätsstr. 24). The seminar commences on 11 November Presentations start in the first week. Additional dates at the end of the semester (t.b.a). Participants: Master students (MSc EconInst, MSc IPE, MSc EMEA, MA EIGL, MA IDS, qualified Nebenfachstudierende ). 3

4 Requirements: None, but I recommend successful participation in a course on Macroeconomics. Course language: English. Topics: The general topics are given below. Specific topics will be fixed with the respective students. Marking: The overall marks for this seminar are based on: Essay and presentation: 80% Discussion of another essay: 20% 4

5 The seminar is limited to a maximum of 20 participants. The didactic approach of a seminar implies the requirement to participate in all sessions. Supervision: I recommend that you hand in the planned structure of your essay to me well in advance before submission. You can also contact me in case of any problems related to writing your essay. Submission date: Essays must be submitted until 31 October 2016 (midnight). It is sufficient to send in the essay via in one pdf-file (Please make sure that you get a reply acknowledging receipt from me). Ilias: Seminar papers and other information will be circulated via the learning platform. So please register (password: macroseminar)! 5

6 Guidelines on essay and discussion Essay length: There is a strict upper limit of 15 pages. Note: The aim is not to write as much as possible in a given period of time but rather to thoroughly refine an economic argument. Scientific writing: Please check the document on writing seminar essays on the Macroeconomics website. Discussion of another essay: As a discussant, you should prepare a critical examination of the work under review, outlining its strengths and weaknesses. Presentation guideline: Presentations should be no longer than 15 min, discussions about 5 min. 6

7 Guidelines on general discussion Please prepare to participate in the general discussion taking place in the aftermath of the presentations. To ensure a high quality of the general discussion, I expect all participants to read the essays prior to the session when they are presented. To increase the incentive to read the essays, I may ask students about their contents. Software and data resources Statistics programmes are available for use within the university server network. The Faculty Library offers access to Statstiknetz.de, which collects macroeconomic data from IMF, OECD, EU and others. 7

8 General references Artis, M. (1994): European Monetary Union, p , in: M.J. Artis und N. Lee (Eds.), The Economics of the European Union, Oxford: Oxford University Press. Baldwin, R. and C. Wyplosz (2012), The Economics of European Integration, Maidenhead: McGraw-Hill. Buti, M. and D. Franco (2005): Fiscal Policy in Economic and Monetary Union: Theory, Evidence And Institutions, Edward Elgar. Eichengreen, B. (1997): European Monetary Unification: Theory, Practice, and Analysis. Cambridge/MA: MIT Press. De Grauwe, P. (2009): Economics of Monetary Union, Oxford: Oxford University Press. 8

9 Topics A. Theoretical Foundations of Monetary Union Dowd, K. und D. Greenaway (1993), Currency Competition Network Externalities and Switching Costs: Towards an Alternative View of Optimum Currency Areas, Economic Journal 103, Goodhart, C. A. E. (1995), The Political Economy of Monetary Union, p , in: P. Kenen (ed.), Understanding Interdependence, Princeton: Princeton University Press. Mundell, R. A. (1961), A Theory of Optimum Currency Areas. American Economic Review 51, Advantages of a Monetary Union in Europe 2. Disadvantages of a Monetary Union in Europe 3. Was the Euro Area in 1999 an Optimum Currency Area? 4. Is the Euro Area in 2016 an Optimum Currency Area? 9

10 B. Monetary Badinger, H. und V. Nitsch (2011), National Representation in Multinational Institutions: The Case of the European Central Bank, CESifo Working Paper Clausen, V. and B. Hayo (2005), Monetary Policy in the Euro Area - Lessons from the First Years, with, International Economics and Economic Policy 1, Cobham, D. (2007), The Travails of the Eurozone, (ed.), Palgrave MacMillan. De Haan, J., S. Eijffinger, and S. Waller (2005), The European Central Bank, MIT Press. ECB (2004), The European Central Bank History, role and functions, Frankfurt. Hayo, B. and P.-G. Méon (2012), Why Countries Matter for Monetary Policy Decision- Making in the ESCB, CESifo DICE Report 10, 21 26, Hayo, B. and B. Hofmann (2006), Comparing Monetary Policy Reaction Functions: ECB versus Bundesbank, Empirical Economics 31, Economic Analysis of the Eurosystem 6. Monetary Policy Instruments in the Euro Area 7. The Monetary Policy Strategy of the ECB 8. Decision Making in the Governing Council 9. Monetary Policy Transmission in Europe 10

11 C. Fiscal Afonso, António and Ricardo M. Sousa (2009), The Macroeconomic Effects of Fiscal Policy, ECB Working Paper Series No 991. Buti, M. and D. Franco (2005), Fiscal Policy in Economic And Monetary Union: Theory, Evidence And Institutions, Edward Elgar. Fatas, A., J. von Hagen, and A. Hughes Hallett (2004), Stability and Growth in Europe, B&T. Hayo, B. and M. Uhl (2011), The Effects of Legislated Tax Changes in Germany, with Matthias Uhl, MAGKS Joint Discussion Paper Series No. 42. Marcellino, M. (2006), Some Stylized Facts on Non-Systematic Fiscal Policy in the Euro Area, Journal of Macroeconomics 28, Wierts, P.J., S. Deroose, E. Flores (2006), Fiscal Policy Surveillance in Europe, (eds.) Palgrave Macmillan. 10. Development of National Fiscal Policies During EMU 11. Measuring the Impact of Expenditure Policy 12. Measuring the Impact of Tax Policy 13. Fiscal Policy in Germany 14. Fiscal Policy in France 15. Fiscal Policy in Italy 11

12 D. International Coordination of Economic Policy Hamada, K. (1976), A Strategic Analysis of Monetary Interdependence, Journal of Political Economy 84, S Feldstein, M. (1988), Thinking about International Economic Coordination, Journal of Economic Perspectives 2, S Leith, C. und S. Wren-Lewis (2000), Interaction between monetary and fiscal policy rules. Economic Journal 110, Uhlig, H. (2002), One Money, But Many Fiscal Policies in Europe: What are the Consequences?, Tilburg University, Center for Economic Research, Discussion Paper No Theoretical Aspects of Macroeconomic Policy Coordination 17. Advantages of Macroeconomic Policy Coordination in Europe 18. Disadvantages of Macroeconomic Policy Coordination in Europe 12

13 E. The Stability and Growth Pact Eichengreen, B. and C. Wyplosz (1998), Stability Pact. More than a Minor Nuisance, Economic Policy 26, Fatas, A. und I. Mihov (2003), On Restricting Fiscal Policy in EMU, Oxford Review of Economic Policy 19. Inman, R. P. (1996), Do Balanced Budget Rules Work? U.S. Experience and Possible Lessons for the EMU: NBER Working Paper Obstfeld, M. und G. Peri (1998), Regional Non-adjustment and Fiscal Policy. S In: David Begg, Jürgen von Hagen, Charles Wyplosz und Klaus F. Zimmermann (Hg.): EMU: Prospects and Challenges for the Euro. Oxford; Malden: Blackwell. 19. EMU and Fiscal Federalisms 20. Economic Rationality of the Stability and Growth Pact 21. Political Economy of the Stability and Growth Pact 22. The Interaction of Monetary- and Fiscal Policy in the Euro Area 13

14 F. Crises in Europe Afonso, A., H.-P. Grüner, and C. Kolerus (2010), Fiscal Policy and Growth. Do Financial Crises Make a Difference? ECB Working Paper No Camerion, D. R. (2012), Fiscal Responses to the Economic Contraction of , mimeo, Yale University ( Frank, N. and H. Hesse (2009), Effectiveness of Central Bank Interventions During the First Phase of the Subprime Crisis, IMF Working Paper 09/206. Spilimbergo, A., S. Symansky, O. Blanchard, and C. Cottarelli (2008), Fiscal Policy for the Crisis, IMF Staff Position Note 08/ Fiscal Policy Reactions to the Financial Crisis in Europe 24. The ECB s Reaction to the Financial Crisis in Europe 25. Fiscal Policy Reactions to the Debt Crisis in Europe 26. The ECB s Reaction to the Debt Crisis in Europe 14