6 ECTS credits
150 h study time
Offer 1 with catalog number 6007644DEW for working students in the 1st semester at a (D) Master - preliminary level.
The content of this course is the study of the European monetary and fiscal policy. The understanding of the interconnections among currencies is essential to understanding the euro potential.
The introductory part of the course will be devoted to the study of the foreign exchange market. We first survey exchange rate basics: national income accounts and the financial consequences of current account deficits, balance of payments accounts, and the balance sheet of a central bank.
The second part will be devoted to building a three-markets model – the DD-AA model (the open economy IS – LM model) – that allows to analyze the impact of government macroeconomic policies (both monetary and fiscal policy) in an open economy and under both floating and fixed exchange rates, such as the Eurozone.
The third part of the course will discuss the institutional frameworks for both Monetary Policy and Fiscal Policy in the EU and the Eurozone. Topics covered will include: the European System of Central the mandate and target of the ECB, the ECB’s two-pillar strategy, the policy instruments of the ECB, a comparison of the ECB with other central banks, the importance of regional differences, fiscal federalism, the interaction between fiscal and monetary policy, etc.
In every new chapter, applications will be integrated in order to blend theory with real world policies, events , and evidence.
Textbook:Feenstra R.C., and A. M. Taylor, International Economics, 5th Edition, 2021 (ISBN 978-1-319-38343-5
Additional material will be made available via the Canvas website of the course.
All slides will be made available via the website.
At the end of the course, students should be familiar with the institutional framework of the European System of Central Banks (ESCB) as well as with the mandate and strategy of the European Central Bank (ECB).
Students should understand how monetary policy works in general (under both floating and fixed exchange rates), and more specifically how the monetary policy instruments of the ECB function.
Students should understand the macro-economic impacts of fiscal policy in a currency union. Students should be able to analyse important issues related to the conduct of economic policy in the euro-zone – and in particular the interaction between fiscal and monetary policy.
Students should have a clear understanding of the factors that influence the external value of the euro. Students should understand the financial implications of running a current account deficit, c.q. surplus. Students should understand the difficulties of conducting monetary policy in the presence of regional differences between eurozone member countries.
Finally, and most importantly, students should also be able to apply the theories studied on real-life cases and come up with an informed opinion.
The final grade is composed based on the following categories:
Written Exam determines 80% of the final mark.
Other Exam determines 20% of the final mark.
Within the Written Exam category, the following assignments need to be completed:
Within the Other Exam category, the following assignments need to be completed:
Final written exam for 80% of the grade. Take home assignments or in-class quizzes for 20% of the grade.
This offer is part of the following study plans:
Master of European Integration: Track 1: European Economy - Migration and Europe
Master of European Integration: Track 2: European Economy - European External Relations and Security Policy
Master of European Integration: Track 3: European Economy - European Environmental Governance
Master of European Integration: Track 7: European Economy - Digitalisation and Europe