European Monetary Integration Research Articles

The Lucas Critique in Practice: An Empirical Investigation of the Impact of European Monetary Integration on the Term Structure

An empirical investigation of the term structure (the relation of the long interest rate to the short interest rate) showed structural change as the deadline for the euro became closer. Our empirical analysis of the term structures (yield curves) in 12 OECD countries uncovers that econometrically estimated behavioural equations for most EMU countries were stable even in the light of the creation of the euro. This finding would seem to defy the Lucas Critique. However, the significant structural instability found for the euro area's core country Germany suggests that the Lucas Critique is relevant in the analysis of the impact of the creation (and future extensions) of EMU.

The Euro under Scrutiny: Histories and Theories of European Monetary Integration

Kenneth Dyson, The Politics of the Euro-Zone. Stability or Breakdown? (Oxford: Oxford University Press, 2000), 311 pp., ISBN 0-199-24164-3. Kenneth Dyson and Kevin Featherstone, The Road to Maastricht. Negotiating Economic and Monetary Union (Oxford: Oxford University Press, 1999), 860 pp., ISBN 0-198-28077-7. Peter Henning Loedel, Deutsche Mark Politics: Germany in the European Monetary System (London: Lynne Rienner, 2000), 264 pp., ISBN 1-555-87835-0. Kathleen R. McNamara, The Currency of Ideas: Monetary Politics in the European Union, (Ithaca: Cornell University Press, 1998), 200 pp., ISBN 0-801-43432-7. James I. Walsh, European Monetary Integration and Domestic Politics. Britain, France, and Italy (London: Lynne Rienner, 2000), 182 pp., ISBN 1-555-87823-7. Amy Verdun, European Responses to Globalisation and Financial Market Integration (London: Macmillan, 2000), 260 pp., ISBN 0-333-71708-2.

Book Reviews

Books reviewed:P., Magnette, (ed.) La Constitution de l'EuropeJ., Peterson and E. Bomberg, Decision‐making in the European UnionP. Moser, G. Schneider and G. Kirchgässner, (eds) Decision Rules in the European Union: A Rational Choice PerspectiveR. Sakwa and A. Stevens, (ed.) Contemporary EuropeP. de Schoutheete, The Case for Europe: Unity, Diversity, and Democracy in the European UnionP. E. Schmitter, How to Democratize the European Union...and Why Bother?R. Ladrech, Social Democracy and the Challenge of European UnionA.J. Day, Directory of European Union Political PartiesG.F. Mancini, Democracy and Constitutionalism in the European Union: Collected EssaysP. Senkovic, L'évolution de la responsabilité de l'Etat législateur sous l'influence du droit communautaireP. Magnette, L'Europe, 1'Etat et la démocratie: Le Souverain apprivoiséR. Ackrill, The Common Agricultural PolicyJ. I. Walsh, European Monetary Integration and Domestic Politics: Britain, France and ItalyA. Geddes, Immigration and European Integration: Towards Fortress Europe?R. Stephen, Vehicle of Influence: Building A European Car MarketF. Chesnais, G. Ietto‐Gillies and R. Simonetti, (eds) European Integration and Global Corporate StrategiesK. O. Alho, (ed.) Economics of the Northern DimensionH. Wallace and W. Wallace, (eds) Policy‐Making in the European Union

National Preferences and International Institutions: Evidence from European Monetary Integration

How do states reach agreement on creating or changing international institutions? The dominant theory of international cooperation—institutional theory—specifies how states with shared interests use institutions to realize joint gains and to minimize the possibility of defection. But institutional theory has little to say about when states will hold the shared interests that lead them to create international institutions in the first place. I evaluate two general explanations of national preferences regarding international institutions against the record of attempts to institutionalize monetary cooperation in the European Union since the 1970s. Drawing on central insights of the constructivist tradition, idea diffusion theory holds that national preferences converged on those of German decision-makers by the late 1980s and that European governments willingly accepted German terms for monetary union. Recognition that German institutions and policies produced superior economic outcomes drove this change in preferences. A domestic-politics explanation holds that preferences varied because of differences in the structure of the domestic political economy and the political costs of achieving price stability, which was one of Germany's conditions for monetary integration. Lower inflation in the late 1980s reduced these costs enough for French and Italian governments to pursue a monetary union that included Germany. The evidence indicates that idea diffusion had little influence on the development of European monetary institutions. Governments held and advocated distinctly different preferences regarding such institutions from the late 1970s through the mid-1990s. The finding that domestic politics rather than idea diffusion drives national preferences challenges some of the claims of recent constructivist literature in international politics about the importance of communication and ideas in promoting cooperation. In the conclusion I discuss how the findings of this article might be squared with constructivism by paying more attention to domestic politics.

WHAT IS 'SOCIOLOGICAL' ABOUT THE EURO?

There are no clear precedents for European monetary integration. It would therefore be unwise to rely too closely on evidence drawn from other monetary systems for an indication of where, when and how problems might arise under the new monetary regime. This article comprises four sections. The first deals with issues of economic convergence and the problems associated with viewing the euro zone countries as an optimum currency area. The second moves on to political questions about the accountability of the European Central Bank (ECB) and its credibility in operating a single monetary policy which targets price stability. In the third section, I consider arguments concerning the implications of the relationship between labour mobility and material interest for the workings of a single monetary policy across the euro zone. In the fourth section, I raise broader questions about cultural divergence in economic behaviour within the euro zone.

Economic and Monetary Union: A Review Article

JCMS: Journal of Common Market StudiesVolume 38, Issue 4 p. 667-676 Economic and Monetary Union: A Review Article First published: 16 December 2002 https://doi.org/10.1111/1468-5965.00259Citations: 1AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Abstract Books reviewed in this article: P. De Grauwe, Economics of Monetary Union (2000) OECD EMU: Facts, Challenges and Policies OECD EMU: One Year on S.C.W. Eijffinger and J. de Haan, European Monetary and Fiscal Policy A. Lamfalussy, L.D. Bernard and A.J. Cabral, The Euro-Zone: A New Economic Entity? A. Hughes-Hallett, M.M. Hutchingson and E. Hougard-Jensen, Fiscal Aspects of European Monetary Integration C. Favero, X. Freixas, T. Persson and C. Wyplosz, One Money, Many Currencies, Monitoring the European Central Bank 2 D. Gros, O. Davanne, M. Emerson, T. Mayer, G. Tabellini and N. Thygesen, Quo Vadis Euro?: The Cost of Muddling Through, 2nd Macroeconomic Policy Report from the Macroeconomic Policy Group Citing Literature Volume38, Issue4November 2000Pages 667-676 RelatedInformation

The Currency of Ideas: Monetary Politics in the European Union. By Kathleen R. McNamara. Ithaca, NY: Cornell University Press, 1998. 185p. $39.95 cloth, $16.95 paper. - Monetary Politics: Exchange Rate Cooperation in the European Union. By Thomas H. Oatley. Ann Arbor: University of Michigan Press, 1997. 222p. $49.50. - Political Economy of Financial Integration in Europe: The Battle of the

The Currency of Ideas: Monetary Politics in the European Union. By Kathleen R. McNamara. Ithaca, NY: Cornell University Press, 1998. 185p. $39.95 cloth, $16.95 paper. - Monetary Politics: Exchange Rate Cooperation in the European Union. By Thomas H. Oatley. Ann Arbor: University of Michigan Press, 1997. 222p. $49.50. - Political Economy of Financial Integration in Europe: The Battle of the

Are pro-welfare state and full-employment policies possible in the era of globalization?

There is a widely held belief in U.S. and European economic, political, and academic circles that economic globalization has considerably diminished states' power to follow public policies identified with the social democratic tradition, such as full-employment policies, comprehensive and universal provision of welfare state services, and state regulatory interventions in labor markets and economic policies. And large sectors of the European center-left and left parties believe that European monetary integration made expansionist and full-employment policies practically impossible, except when realized at the European continental level. This article presents empirical information that questions these positions. It documents how specific governments in Europe have been able to carry out such public policies during these years of economic globalization and monetary integration. Some countries (such as Sweden and Finland) that had carried out these policies then later weakened their implementation did so in response to political changes mostly unrelated to globalization of the economy or monetary integration. The article also analyzes and documents how countries that had followed expansionist and full-employment policies have responded to the globalization of financial markets.

European monetary and economic integration: present state and future directions

European monetary and economic integration: present state and future directions

European Monetary Integration and Domestic Politics

European Monetary Integration and Domestic Politics

Fiscal aspects of European monetary integration Andrew Hughes Hallett, Michael M. Hutchison, and Svend E. Hougaard Jensen (Editors) Cambridge University Press, Cambridge 1999, 362 pp. Price: �45.00. ISBN 0 521 65162 X

International Journal of Finance & EconomicsVolume 5, Issue 3 p. 251-252 Book Review Fiscal aspects of European monetary integration Andrew Hughes Hallett, Michael M. Hutchison, and Svend E. Hougaard Jensen (Editors) Cambridge University Press, Cambridge 1999, 362 pp. Price: £45.00. ISBN 0 521 65162 X Paul R. Bergin, Paul R. Bergin Department of Economics, University of California at Davis, USASearch for more papers by this author Paul R. Bergin, Paul R. Bergin Department of Economics, University of California at Davis, USASearch for more papers by this author First published: 28 July 2000 https://doi.org/10.1002/1099-1158(200007)5:3<251::AID-IJFE129>3.0.CO;2-1Citations: 1AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat No abstract is available for this article.Citing Literature Volume5, Issue3July 2000Pages 251-252 RelatedInformation

The Dynamics of EMU Ideas

With a view to better understanding why the `Maastricht EMU' — contrary to various proposals for Economic and Monetary Union from early history of European monetary integration — gives priority to `sound money and finances' and central bank independence over other macro-economic objectives, it is suggested that the EMU be considered as being the very last stage of an `ideational life-cycle' that took off at the end of the 1970s. Contrary to approaches which focus on the strategic negotiations during the Intergovernmental Conference at the beginning of the 1990s, it is argued that EMU ideas can be better understood if the major areas of agreement, consensus, shared knowledge structures, or simply causal ideas, are studied rather than areas of conflict and disagreement. It is argued that the ideational life-cycle helps us to grasp why there was in fact so little controversy among European elites by the end of the 1980s about such basic issues as central bank independence, price stability, and sound finance convergence criteria. EMU ideas are results of uncontroversial and transnational agreement at the elite level rather than strategic bargaining.

Money and its Economic and Social Functions: Simmel and European Monetary Integration

Abstract This essay tries to put Georg Simmels The Philosophy of Money into the context of current monetary discussions in economics. Part I looks at the contribution of Georg Simmel in context and offers remarks about the changing structure of economics as a discipline composed of many different subdisciplines. It is argued that Simmel is able to transcend subdisciplinary borders, to great benefit for today's scholar. Part III explains Heinsohn and Steiger's recent contribution to monetary economics in terms of transactions and property rights; although the contribution has been made more in the context of post‐Keynesian economics, this is the only way to comprehend and integrate it into the mainstream of scholarly discourse. This examination shows that Simmels approach, transgressing interdisciplinary borders, has merits even today. Part IV looks at the perplexing phenomenon of European monetary integration with a similar interdisciplinary perspective in mind. In this case, it is not monetary economics but constitutional political economy which is the unifying concept to explain the peculiar features of European monetary integration.

Consensus and Constraint: Ideas and Capital Mobility in European Monetary Integration

The critical foundation for European monetary integration is the neoliberal economic policy convergence that occurred across the majority of the European governments beginning in the mid‐1970s and solidifying in the 1980s. While capital mobility determines the conditions under which international monetary agreements can be sustained, political leaders’ policy ideas or shared normative and causal beliefs about monetary policy are necessary to explain whether states choose to meet those conditions. These ideational factors are critical in part because of the high degree of uncertainty over the distributional effects of exchange rate and monetary co‐operation, ambiguity which mutes both mass political debate and sectoral interest‐group activity. A template of ideational change is thus proposed to explain the path of European monetary integration.

European monetary integration

PART I. A BRIEF HISTORY OF EUROPEAN MONETARY INTEGRATION. 1. The Beginning: From European Payments Union to the Snake. 2. The Making of the European Monetary System. 3. The European Monetary System. PART II. THE EUROPEAN MONETARY SYSTEM AND THE ECU. 4. Analytical Issues: A Critical Appraisal of the EMS, 1979 - 92. 5. Lessons from a Failed Transition? The Speculative Attacks of 1992 - 5. 6. From the ECU to the Euro. PART III. THE ECONOMICS OF MONETARY UNION. 7. Why Monetary Union? 8. Costs and Benefits of EMU. 9. The Relationship between Economic and Monetary Integration: EMU and National Fiscal Policy. 10. EMU and the Global Monetary System. PART IV. TOWARDS MONETARY UNION. 11. Agreeing on EMU: from Political Initiatives to the Delors Report and the Maastricht Treaty. 12. After Maastricht: Concrete Steps towards Monetary Union. 13. The European System of Central Banks and Price Stability. 14. Outlook and Conclusions. Index.

Social Housing Finance in Europe: Trends and Opportunities

The central topic of this contribution is the financing of the social rented sector in seven countries in western Europe: the Netherlands, Belgium, Denmark, Germany, Great Britain, France and Sweden. Since 1975, the macro housing quota has increased in all seven countries, but most of all in the Netherlands. Property subsidies have been reduced; housing allowances have become more important. The differences in size of the social rented sector remain large. Private finance has mostly replaced public loans, with the exception of Germany where interest-free government loans cover part of the finance needed. In most countries, guarantees for capital market loans exist, Great Britain being the exception. In the near future, changes in social housing finance may be expected as a result of European monetary integration. The euro will (for the time being) not be introduced in Denmark, Great Britain and Sweden. The costs of capital may decline when social housing finance becomes more internationalised.

European Monetary Integration, 1958-2002

This book is an accessible introduction to European monetary integration which provides a historical background to current debates, as well as an analysis of future developments. Further features of this book include: * a chronology of economic and monetary unification from 1958-1999 * clear non-technical presentation of the economic issues regarding the costs and benefits of creating a monetary union * detailed presentation of the economic and legal framework for the changeover to a single European economy * evaluation of the Maastricht Treaty's plan for monetary union * an overview of the debate between the federalist approach and the inter-governmental co-operation approach towards economic and political integration of Europe * a set of questions and exercises illuminating the more technical parts of the book European Monetary Integration 1958-2002 is an excellent resource for all those who want to discover the facts about European monetary integration which lie behind the heated political rhetoric.

The role of the Delors Committee in the creation of EMU: an epistemic community?

The agreement on economic and monetary union (EMU) in the European Union (EU) is a significant move in the integration process. In explanations as to why EMU was accepted and incorporated in the Maastricht Treaty, little attention has been given to the role of monetary experts in this process. This article examines their role in the creation of EMU by focusing on the Delors Committee that wrote the blueprint for EMU which was inserted in the Maastricht Treaty with few amendments. The article discusses whether it was necessary for the EMU momentum that these monetary experts held similar ideas about how European monetary integration had to proceed. Furthermore, it investigates whether the Delors Committee fits the definition of an 'epistemic community' (Haas 1992) and concludes that this is indeed the case. The article closes by suggesting that this conceptual tool could enlarge our understanding of the role of expert committees in the process of European public policy-making.

欧州通貨統合の不整合構造とEMU以後の問題

European Union starts the 3rd stage of EMU on January 1999. It will symbolize a grand new epoch for the monetary history, but also will it include so many problems that the European monetary integration may proceed into the negative big bang.Many papers indicate that 3rd stage with EURO has a lot of problems, but they didn't explain the essence of these problems. My paper firstly explains that there is the structural disparity in the EMU process, and tries to offer the concept ‘conditional transformation’ to theorize that disparity.This paper systemizes the 3 elements which make up the structure of monetary integration. The first element is monetary theory. The second one is integrational ideation. The third one is the reality which surrounds the monetary integration.Monetary theory is represented by Optimum Currency Area theory. Integration ideal has changed into the policy concept named convergence criteria. And these two elements seems very similar in its appearance. But actually the characteristics of these two are quite different.OCA criteria are the sufficient condition, and convergence criteria are the necessary condition. These two criteria cannot coincide with each other except in the period when the economy is located in its relative boom. In fact this happened in the latter half of '80s and allowed the coincidence of theory, ideal and economic reality.Maastricht regime could be justified on the feasibility of necessary-sufficient condition of this specific period. But the problem is that this specificity cannot be extended into the general situation.The general disparity in the EMU structure develops into the divergence between the monetary policy and fiscal policy and produces the problem of sustainability. The former is completed regionally in the form of single currency EURO, but the latter is on the most part in the control of national authorities. ERM II or the Stabilization Pact cannot fully support the EMU3 regime in its transition. Because of the primary divergence between the conditions, the Europe-wide adverse economic development, especially asymmetric one, can negatively affect the sustainability of EMU. In this situation the only reference that can sustain this regime is ideal-biased policy. In that context, EMU3 regime's essential problem is how long the integration ideation can suppress the problematique emanated from the structure of the theoretical condition and economic reality before it reaches the perfect political-economic union.

The Law and Economics of European Monetary Integration

The review articles draws attention to the need of serious law and economics analysis of the Maastricht Treaty. It first discusses the convergence criteria, then delves into the history of monetary integration with the example of Germany, looks thirdly at the basic theoretical model underlying the main stream analysis, forthly deals with adjustment problems and finally emphasizes a constitutional law and economics aspect.