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We present a two-country New Open Economy Macro model of the Austrian economy within the European Union's Economic & Monetary Union (EMU). The model includes both nominal and real frictions that have proven to be important in matching business cycle facts, and that allows for an investigation of the effects and cross-country transmission of a number of structural shocks: shocks to technologies, shocks to preferences, cost-push type shocks and policy shocks. The model is estimated using Bayesian methods on quarterly data covering the period of 1976:Q1- 2005:Q1. In addition to the assessment of the relative importance of various shocks, the model also allows to investigate effects of the monetary regime switch with the final stage of the EMU and investigates in how far this has altered macroeconomic transmission. We find that Austria's economy appears to react stronger to demand shocks, while in the rest of the Euro Area supply shocks have a stronger impact. Comparing the estimations on pre-EMU and EMU subsamples we find that the contribution of (rest of the) Euro Area shocks to Austria's business cycle fluctuations has increased significantly. (author´s abstract) / Series: EI Working Papers / Europainstitut

Diploma thesis aims to offer explanation of reasons that triggered sovereign debt crisis in European monetary union (EMU). Theoretical part describes EMU development since its very beginning and day to day operation, role that ECB plays in the system and most frequently used monetary policy operations by ECB. Practical part is concerned in pre-crisis macro economical development in countries that suffer the most, Greece and Ireland and represent 2 main models how to run into a difficulties and forced to use support of international institutions as ECB and IMF. Scope of diploma thesis is to analyze macroeconomic development, current situation and discuss possible scenarios to solve existing situation and their impact on future of ECB.

Hace tan solo unos años se introdujo el euro como moneda de pleno derecho en once países de la Unión Europea. Sin embargo, a lo largo del tiempo, este proyecto se ha enfrentado a diversos obstáculos, y uno de los más relevantes es el no conocer precisamente el efecto que la Unión Monetaria podría tener en las economías de la región. Las tasas de interés son variables fundamentales en el desempeño coyuntural de cualquier nación, por lo que su manejo por parte del Banco Central implica consecuencias importantes. A partir del mes de Enero de 1999, la difícil tarea de fijar los tipos de interés comunes para todos los países miembros de la Zona Monetaria Europea, independientemente sus características particulares, está a cargo del Banco Central Europeo. En esta investigación se busca determinar las variables más importantes que afectan el comportamiento de las tasas de interés, y al mismo tiempo saber que efecto ha ocasionado la introducción del euro en las mismas, por lo que el trabajo se ha dividido en dos partes. En la primera parte se estudian diversas ecuaciones, creadas con base en ciertas teorías relacionadas con el tema (Akthar 1987, Fischer 1990, Cohen y Wennigen 1994, Lee y Prasad 1994, Patterson 1999, Haley 2000.) por lo que se obtienen las variables más significativas en cada una de ellas. En la segunda parte se analizan las variables de la primera parte, y se definen cuales fueron afectadas por la introducción del euro. Para ambas secciones se utiliza una Base de Datos del Boletín Mensual del Mes de Enero del 2001 del Banco Central Europeo. El período estudiado comprende desde el mes de Enero de 1997 hasta Octubre del 2000. Para efectuar el análisis se emplean los modelos de regresión lineal y split regression, de forma que es posible determinar la relación entre las variables, su nivel de significación en los modelos empleados, y el efecto sufrido por la introducción del euro. El resultado del análisis muestra que la introducción de la moneda única tuvo un fuerte impacto en la mayoría de las variables analizadas y por consecuencia en las tasas de interés de la zona euro. La introducción de la divisa comunitaria implicó la disminución de los tipos de interés promedio en la región, sin embargo fue posible observar un incremento en los mismos durante los últimos meses analizados. Este comportamiento ha sido la respuesta del Banco Central Europeo para mantener la estabilidad de precios ante los fenómenos presentados en el segundo semestre del año 2000, como han sido la debilidad del euro con relación al dólar americano, los elevados precios del petróleo, falta de interés y confianza en la moneda común por parte de Dinamarca, Suecia y el Reino Unido, el prolongado e ininterrumpido crecimiento sostenido de la economía estadounidense hasta antes de Enero del 2001, crisis agropecuarias y la caída de los índices bursátiles.

This thesis examines fiscal policy coordination in the EU during the Great Recession (2008-2010). For the first time since the Maastricht Treaty heralded the coordination of macroeconomic policies among EU Member States, public finances were collectively focused on stimulus policies. In sharp contrast to the preceding decade of consolidation and constraint, fiscal policy coordination during the Great Recession presents a novelty: a study in fiscal expansion. Drawing on Mancur Olson’s Logic of Collective Action, this thesis uses a mixed-methods approach that combines the insights from over 40 in-depth interviews and econometric analyses. The central argument of this thesis is that the fiscal crisis responses of EU Member States were not coordinated. Yet despite this lack of coordination, free-riding was kept at bay. First, the overarching consensus on the need for counter-cyclical fiscal policies prevented growth free-riding (i.e. a situation of limited domestic stimulus and free-riding on other countries’ expansive fiscal policies). Second, discipline imposed by financial market participants contributed to policy-makers’ awareness of their limited room for fiscal manoeuvre, which meant that stability free-riding (i.e. stimulus policies that exceeded a country’s fiscal space) did not occur. The first finding suggests the importance of shared policy ideas in achieving collective action; the second points to the role of financial markets in constraining public finances. Ultimately both, shared policy ideas and market discipline, can function as a substitute for strong institutional commitment to shape group oriented behaviour.

We propose the analysis of the dynamics of the standard deviation of business cycles across euro area countries in order to evaluate the patterns of cyclical convergence in the European Monetary Union for the period 1960-2008. We identify significant business cycle divergence taking place in the mid-eighties, followed by a persistent convergence period spanning most of the nineties. This convergent episode finishes roughly with the birth of the European Monetary Union. We show that a hypothetical euro area including all the new members of the recent enlargement rounds does not imply a sizeable decrease in the optimality of the currency union. Finally, the European synchronization differential with respect to other developed economies seems to have been diluted within a global cycle since 2004.

This paper investigates the patterns and determinants of the co-movement of economic activity across regions in the European Union. Using a panel data of 208 EU-15 regions over the period 1989-2002 we estimate a system of four simultaneous equations to analyse the impact of regional trade integration, specialization and exchange rate volatility on correlations of regional growth cycles with the Euro area. We find that deeper trade integration with the Euro area had a strong direct positive effect on the synchronisation of regional growth cycles with the Euro area. Industrial specialisation and exchange rate volatility were sources of cyclical divergence. Industrial specialisation had however an indirect positive effect on growth cycles synchronisation via its positive effect on trade integration, while exchange rate volatility had an indirect additional negative effect on growth cycle correlations by reducing trade integration. Industrial specialisation had an indirect negative effect on growth cycle correlations by increasing the exchange rate volatility. The direct impact of trade integration on growth cycle correlations was stronger in the pre-EMU sub-period, while in the EMU subperiod, the negative direct effects of industrial specialisation and exchange rate volatility were stronger than in the pre-EMU sub-period. A distinct result is the positive and significant relationship between exchange rate volatility and growth cycle correlations in the pre-EMU sub-period, suggesting that over this period, country-specific exchange rate fluctuations acted as shock absorbers. Our analysis is relevant in the context of the discussion about the macroeconomic adjustment to region-specific shocks in the European Monetary Union. (authors' abstract) / Series: EI Working Papers / Europainstitut

Thesis advisor: James Cronin / In 1957, the Treaty of Rome was signed by six West European states to create the European Economic Community (EEC). Designed to foster a common internal market for a limited amount of industrial goods and to define a customs union within the Six, it did not at the time particularly stand out among contemporary international organizations. However, by 1992, within the space of a single generation, this initially limited trade zone had been dramatically expanded into the world's largest trade bloc and had pooled substantial sovereignty among its member states on a range of core state responsibilities. Most remarkably, this transformation resulted from a thoroughly novel political experiment that combined traditional interstate cooperation among its growing membership with an unprecedented transfer of sovereignty to centralized institutions. Though still lacking the traditional institutions and legitimacy of a fully-fledged state, in many policy areas, the European Union (EU) that emerged in 1992 was nonetheless collectively a global force. My dissertation argues that the organization's unprecedented transfer of national sovereignty challenged the very definition of the modern European state and its function. In structure and ambition, it represented far more than just a regional trade bloc among independent states: it became a unique political entity that effectively remodelled the fundamental blueprint of the conventional European state structure familiar to scholars for generations. How did such a dramatic transformation happen so quickly? I argue that three forces in particular were at play: the external pressures of globalization, the search for a new Western European and German identity within the Cold War world and the often unintended consequences of the interaction between member state governments and the Community's supranational institutions. In particular, I examine the history of the EEC's monetary union, common foreign policy, common social policy and the single market to explain the impact of the above forces of change on the EEC's rapid transformation. / Thesis (PhD) — Boston College, 2014. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: History.

O objetivo deste estudo é investigar, através do estimador de diferenças em diferenças, se a adoção da união monetária européia ampliou tanto o comércio quanto a correlação bilateral dos ciclos econômicos entre seus membros, em comparação com outras economias da OCDE. A evidência apresentada sugere ser esse o caso, nos indicando que a união monetária, como processo último das teorias de integração, pode não ser um fim, mas sim um meio para o alcance da integração entre as economias. / The goal of this paper is to investigate, by means of a simple difs-in-difs technique, whether the adoption of the monetary union among the members of the European Monetary Union (EMU) has increased both bilateral trade and bilateral correlation of business cycles between them rather than amidst other OECD economies. We present evidence suggesting this to be the case, witch tells us that monetary union, as the last stage of the theories of economic integration, may not be an end by itself, but means of achieving the economic integration.