Routledge Handbook of the Economics of European Integration

537 Pages·6.799 MB·English

by  Badinger, Harald

ROUTLEDGE HANDBOOK OF THE
ECONOMICS OF EUROPEAN INTEGRATION
Routledge Handbook of the Economics of European Integration provides readers with a brief but
comprehensive overview of topics related to the process of European integration in the post-
Second World War period. Its short chapters reflect the most up-to-date and concise research,
written by a collective of experts on their own subjects.
The aim of the Handbook is twofold. First, the text illustrates the broad and diverse range of
issues associated with European integration, and lastly, the key approaches and findings are sum-
marised. Since institutional integration in Europe is an ongoing process, with possibly frequent
and sometimes rapid changes, the chapters are intended to focus on the key features of the
economic analyses of these topics.
A wide and diverse set of economic issues is of direct relevance for European integration.
These topics cover various fields, ranging from the history of the European Economic and
Monetary Union, EU Trade Policy and the stability of international trade, single market issues
over fiscal, monetary and other policies, the crisis that faces the Euro area, and institutions such
as the EU Council of Ministers. Not surprisingly, many of these issues have also been analysed
from a European perspective.
The Handbook is designed to provide students, researchers, policy makers and the public with
ready and accessible knowledge of issues related to European integration and will provide the
definitive overview of research in the area.
Harald Badinger is Full Professor of International Economics, Vienna University of
Economics and Business (WU Vienna), Austria.
Volker Nitsch is Full Professor of Economics and Chair of International Economics at the
Department of Law and Economics, Darmstadt University of Technology, Germany.
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ROUTLEDGE HANDBOOK
OF THE ECONOMICS OF
EUROPEAN INTEGRATION
Edited by Harald Badinger and Volker Nitsch
First published 2016
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2016 selection and editorial material, Harald Badinger and Volker Nitsch;
individual chapters, the contributors.
The right of the editors to be identified as the author of the editorial material,
and of the authors for their individual chapters, has been asserted in accordance
with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised
in any form or by any electronic, mechanical, or other means, now known or
hereafter invented, including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or registered
trademarks, and are used only for identification and explanation without intent
to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Routledge handbook of the economics of European integration / edited by Harald
Badinger and Volker Nitsch.
pages cm
1. European Union. 2. European Union countries—Economic integration—
History. 3. European Union countries—Economic policy—History.
4. Monetary policy—European Union countries—History. 5. Financial
services industry—European Union countries—History. I. Badinger, Harald,
1974- editor. II. Nitsch, Volker, editor. III. Title: Handbook of the economics
of European integration.
HC241.R68 2015
337.1'42—dc23
2015015193
ISBN: 978-0-415-74770-7 (hbk)
ISBN: 978-1-315-79691-8 (ebk)
Typeset in Bembo
by Keystroke, Station Road, Codsall, Wolverhampton
CONTENTS
List of figures ix
List of tables xiii
List of contributors xv
Preface xix
PART I
History 1
1 West European economic integration since 1950 3
Nicholas Crafts
2 The history of European economic and monetary union 22
Harold James
3 History of economic thought and policy-making at the European
Commission 38
Ivo Maes
PART II
The Single Market and the euro 53
4 The economics of the Single Market 55
Harry Flam
5 Factor movements: FDI 70
Bent E. Sørensen and Carolina Villegas-Sanchez
v
Contents
6 The euro as an international currency 82
Agnès Bénassy-Quéré
PART III
Monetary and fiscal policy 101
7 The common currency: More complicated than it seems 103
Charles Wyplosz
8 Design failures in the Euro Area: Can they be fixed? 119
Paul De Grauwe
9 The credit channel of monetary policy in the Euro Area 132
Angela Maddaloni and José-Luis Peydró
10 Fiscal policy in the EU: An overview of recent and potential future
developments 143
Roel Beetsma
11 The roles of fiscal rules, fiscal councils and fiscal union in EU
integration 157
Lars Calmfors
PART IV
Trade issues 171
12 European integration and the gains from trade 173
Gianmarco I.P. Ottaviano
13 The effects of European integration on the stability of international
trade: A duration perspective 188
Tibor Besedeš
14 EU trade policy 205
André Sapir
15 The EU and the US: T TIP 220
Gabriel Felbermayr
16 The EU and the ACP countries 238
Ludger Kühnhardt
vi
Contents
PART V
Selected policy areas 253
17 Regional policy 255
Sascha O. Becker, Peter H. Egger and Maximilian von Ehrlich
18 The common agricultural policy 269
Johan Swinnen
19 Labor and social policy 284
Giuseppe Bertola
20 Tax competition and tax coordination 295
Christian Keuschnigg, Simon Loretz and Hannes Winner
21 Financial market integration, regulation and stability 312
Angel Ubide
PART VI
The crisis 329
22 The crisis in retrospect: Causes, effects and policy responses 331
Fritz Breuss
23 Exceptional policies for exceptional times: The ECB’s response to
the rolling crises of the euro area 351
Lucrezia Reichlin and Huw Pill
24 Living (dangerously) without a fiscal union 376
Ashoka Mody
25 Reforming the architecture of EMU: Ensuring stability in Europe 408
Jakob de Haan, Jeroen Hessel and Niels Gilbert
PART VII
Institutions 433
26 The political economy of European integration 435
Enrico Spolaore
27 Efficiency, proportionality and member states’ power in the EU
Council of Ministers 449
Nikolaos Antonakakis, Harald Badinger and Wolf Heinrich Reuter
vii
Contents
28 Measuring European economic and institutional integration 467
Helge Berger and Volker Nitsch
29 The dynamics of European economic integration: A legal
perspective 478
Erich Vranes
Index 497
viii
FIGURES
2.1 Current accounts in Europe 1960–2010 26
4.1 Welfare effects of customs union 57
4.2 Welfare effects of reduction in trade costs 59
4.3 Welfare effects of eliminating quotas 60
4.4 Scale effects of integration 62
4.5 Welfare effects of factor mobility 64
5.1 FDI inflows in EU 27 74
5.2 Main recipients of intra-EU FDI inflows 75
5.3 Main recipients of FDI inflows 76
5.4 EU-27 share of FDI inflows in gross fixed capital formation 76
5.5 GIIPS share of FDI inflows in gross fixed capital formation 77
6.1 Gross cross-border assets and liabilities (excluding own currency area,
in USD bn) 84
6.2 Direct and indirect foreign exchange 86
7.1 Budget balances (% of GDP) 107
7.2 Employment rates (% of total population) 109
7.3 Ratio emigrants/immigrants 110
7.4 Trade concentration index (2007) 111
8.1 Inflation and labor costs, 2002–2008 122
8.2 Euro area current accounts 123
8.3 Spreads 10-year government bond rates Eurozone 125
8.4 Relative unit labor costs Eurozone: Debtor nations 126
8.5 Relative unit labor costs Eurozone: Creditor nations 127
9.1 Monetary policy and the credit channel 133
9.2 Lending standards in the euro area, Germany and Italy 136
10.1 Interaction between national and EU level 148
10.2 The European semester 149
12.1 Gains from trade for selected EU countries 182
12.2 Welfare losses from US protectionism for selected EU countries 183
13.1 EU upgrades 196
13.2 The effect of the age of the EU 197
ix