Course syllabus TEIAC - Theory of Economic and Monetary Integration (FBE - WS 2016/2017)


     Czech          English          


Course code:
TEIAC
Course title in Czech:
Theory of Economic and Monetary Integration
Course title in English: Theory of Economic and Monetary Integration
Semester:
WS 2016/2017
Mode of completion and number of credits: Exam (6 credits)
Mode of delivery and timetabled classes: full-time, 2/2 (hours of lectures per week / hours of seminars per week)
Level of course:
master
Course type:
required
Type of delivery:
usual, consulting
Mode of delivery for our mobility students abroad:
-- item not defined --
Language of instruction:
English
Course supervisor:
Course supervising department:
Department of Finance (FBE)
Faculty:
Teachers: prof. Ing. Lubor Lacina, Ph.D. (examiner, instructor, lecturer, supervisor, tutor)
Ing. Maroš Zruban (examiner, instructor, lecturer, tutor)
Prerequisites:
 
Timetable in this semester:
-- item not defined --
 
Aim of the course and learning outcomes:
The course introduces theory of optimum currency area (monetary union). The historical background of European monetary integration is also briefly described. The core of the course is aimed at analyses of the theory of monetary integration, fiscal policy in monetary union, the role of European Central Bank within European Monetary Union and eurozone crisis and its possible solutions.
 
Course content:
1.European Economic and monetary integration (allowance 2/2)
 
a.
Steps of economic and political integration in West Europe - from custom to monetary union
b.
Eurozone crisis - roots and future

2.
The Theory of Optimum Currency Areas: Cost analysis (allowance 4/2)
 
a.The Costs of a Common Currency
b.
Different Preferences of Countries about Inflation and Unemployment
c.
Differences in Growth Rates
d.
Different Fiscal Systems

3.
The Theory of Optimum Currency Areas: A Critique (allowance 4/4)
 
a.
How Relevant are the Differnes Between Countries?
b.How effective are national monetary policies?
c.
Devaluation, Time Consistency, and Credibility
d.
The Cost of Monetary Union and the Openness of Countries

4.
The Benefits of a Common Currency (allowance 2/2)
 
a.Direct and Indirect Gains from the Elimination of Transaction Costs
b.
Exchange Rate Uncertainty and the Price Converegence
c.Exchange Rate Uncertainty and the Economic Growth
d.Benefits of Monetary Union and the Openness of Countries

5.
OCA Theory: Cost and Benefits Compared (allowance 2/2)
 
a.Otpimistic vers. pessimistic view, , Price and Wage Rigidities, and Labour Mobility
b.
Asymmetric Shocks and Labour Market Flexibility
c.Costs and Benefits in the Long Run

6.
Fragility of Incomplete Monetary Unions (allowance 2/2)
 
a.
The Credibility and Liquidity Problem in Pegged Exchange rate Systems
b.The Disintegration of the EMS in 1992-3
c.
A monetary union without budgetary union

7.The transition to a Monetary Union (allowance 2/2)
 
a.
The Maastricht Treaty and Convergence Criteria
b.Why Convergence Requirements?
c.
Alternative Transition Scenarios and Requirements

8.
The Design of Eurosystem (allowance 2/2)
 
a.
The Design of eurosystem and the role of ECB
b.
Political Independence and Inflation
c.
The Design of the ECB: Further Issues

9.
Monetary Policy in the Eurozone (allowance 2/2)
 
a.
Central banking and asymmetries of shocks
b.The monetary strategy of ECB
c.The instruments of monetary policy in eurozone
d.The role of ECB during the crisis: ECB as lender of last resort

10.Fiscal Policies in Monetary Unions (allowance 2/4)
 
a.
Fiscal Policies and the Theory of Optimum Currency Areas
b.
Sustainability of Government Budget De
c.
The Argument for Rules on Government Budget Deficits
d.
Fiscal Discipline in Monetary Unions
e.Risks of Default and Bailout in a Monetary Union
f.
The Stability Act Reform: An Evaluation

11.Eurozone Future: How to Complete a Monetary union? (allowance 4/4)
 
a.Eurozone Crisis: roots and dynamics of the crisis.
b.
Consolidating governemnt budgets and deficits
c.
Coordination of budgetary and economic policies
d.Eurzone future scenarious: Is fiscal union feasible?

Learning activities and teaching methods:
Type of teaching method
Daily attendance
lecture
28 h
practice28 h
preparation for exam
72 h
preparation for regular testing
40 h
Total
168 h
 
Assessment methods:
Three 50 minutes written tests (60% of the total mark) during the block (you have to receive minimum 36 points from maxim 60 to receive credit). The course is finished with oral exam (40% of the total mark).
Credit is compulsory for final exam participation.
 
Assessment criteria ratio:
Requirement type
Daily attendance
Total
0 %
 
Recomended reading and other learning resources:
Basic:
Economics of monetary union. 9th ed. Oxford: Oxford University Press, 2012. 1 p. ISBN 978-0-19-960557-6.
GRAUWE, P D. Economics of monetary union. 8th ed. Oxford: Oxford University Press, 2009. 290 p. ISBN 978-0-19-956323-4.

Recommended:
LACINA, L. -- FIDRMUC, J. -- RUSEK, A. Economic Performance of European Union: Issues, Trends and Policies. 1st ed. Houndmills: Palgrave Macmillan, 2008. 262 p. ISBN 978-0-230-22227-4.

Course listed in study plans for this semester:
Field of study C-EPA-FIM Finance and Investment Management, full-time form, initial period SS 2014/2015
Field of study C-EPA-FIM Finance and Investment Management, full-time form, initial period WS 2015/2016
 
Course listed in previous semesters:
Teaching place: Brno


Last modification made by Ing. Jiří Gruber on 05/19/2016.

Type of output: