Yes / Although the eurozone sovereign debt crisis took many by surprise following the Global Financial Crisis induced Great Recession, this chapter argues that this was an accident waiting to happen with unjustified emphasis placed upon unproven rules and institutions derived from contemporary neoliberal macroeconomic thinking. First, recent developments in macroeconomic are discussed and evaluated in terms of the so-called New Consensus Macroeconomics (NCM) that forms the current mainstream macroeconomic model comprising a blend of New Classical and New Keynesian theories is through adopting the rational behaviour hypothesis and supply-side-determined long-term equilibrium of output. A particular feature of these ideas is the inclusion of rules and institutions that are perceived to result in time consistent policymaking through essentially binding politicians from undertaking in non-optimal behaviour for either opportunistic, partisan or non-rational expectations reasons. Second, in addition to the general backdrop of macroeconomics the chapter considers the notion of a monetary union between countries under the rubric of both exogenous and endogenous Optimum Currency Area (OCA) theory. This combination of theoretical propositions form the bedrock of the eurozone where the TEU convergence criteria and SGP form the rules, while the European Central Bank is the key institution tasked with delivering low and stable price inflation. However, although these notions have become the staple diet of a generation of mainstream economists they comprehensively failed to insulate the eurozone from its sovereign debt crisis. / Full text of this chapter will be released for public view at the end of the publisher embargo on 1 Nov 2019.

Yes / Although the eurozone sovereign debt crisis took many by surprise following the Global Financial Crisis induced Great Recession, this chapter argues that this was an accident waiting to happen with unjustified emphasis placed upon unproven rules and institutions derived from contemporary neoliberal macroeconomic thinking. First, recent developments in macroeconomic are discussed and evaluated in terms of the so-called New Consensus Macroeconomics (NCM) that forms the current mainstream macroeconomic model comprising a blend of New Classical and New Keynesian theories is through adopting the rational behaviour hypothesis and supply-side-determined long-term equilibrium of output. A particular feature of these ideas is the inclusion of rules and institutions that are perceived to result in time consistent policymaking through essentially binding politicians from undertaking in non-optimal behaviour for either opportunistic, partisan or non-rational expectations reasons. Second, in addition to the general backdrop of macroeconomics the chapter considers the notion of a monetary union between countries under the rubric of both exogenous and endogenous Optimum Currency Area (OCA) theory. This combination of theoretical propositions form the bedrock of the eurozone where the TEU convergence criteria and SGP form the rules, while the European Central Bank is the key institution tasked with delivering low and stable price inflation. However, although these notions have become the staple diet of a generation of mainstream economists they comprehensively failed to insulate the eurozone from its sovereign debt crisis.

The purpose of the dissertation is to establish a framework with which to assess the prospective gains from regional monetary integration among five neighboring countries in East Africa: Burundi, Kenya, Rwanda, Tanzania, and Uganda. The neo-classical theory assumes that economic and monetary union would stimulate additional growth in such a union as a whole, with the trickle-down effects of overall development, and would enhance factor mobility, solving the problem of regional disparity automatically. Past experiences of African regionalism have shown that countries that participated in a monetary union were able to pursue credible monetary policies. This economic performance has been credited to their monetary policy discipline. Since countries in East Africa are small both in terms of their individual populations and the respective sizes of their economies, the study concludes that regional integration is a useful way of increasing their economic clout and bargaining power on the global scene. / Economics / Thesis (M. Comm.)

The purpose of the dissertation is to establish a framework with which to assess the prospective gains from regional monetary integration among five neighboring countries in East Africa: Burundi, Kenya, Rwanda, Tanzania, and Uganda. The neo-classical theory assumes that economic and monetary union would stimulate additional growth in such a union as a whole, with the trickle-down effects of overall development, and would enhance factor mobility, solving the problem of regional disparity automatically. Past experiences of African regionalism have shown that countries that participated in a monetary union were able to pursue credible monetary policies. This economic performance has been credited to their monetary policy discipline. Since countries in East Africa are small both in terms of their individual populations and the respective sizes of their economies, the study concludes that regional integration is a useful way of increasing their economic clout and bargaining power on the global scene. / Economics / Thesis (M. Comm.)

The accession to the European Monetary Union is fundamentally changing the role of the Czech national bank. Aim of this work is to describe and evaluate this new role of the CNB in connection with the transfer of its former powers to the ECB. The theoretical part of the work deals with the role of central banking in general, the role of the CNB before the accession to the EMU and the role of ECB in monetary union. The work reviews compliance with the conditions required for the accession to the EMU. Further it focuses on the analysis of CNB monetary policy in recent years, particularly its interest rates policy. In view of the future situation in the field of monetary policy the work draws on the experience of Slovakia after its entry into the euro zone and respondes to the question of whether uniform monetary policy is equally applicable to all member states of the euro area by using the Theory of Optimum Currency Area. The work also analyzes the actions of the ECB and the CNB caused by the current economic crisis.

This Diploma Paper provides an analysis of the Czech Republic convergence process, which importance grows more in the period before entry into the European Monetary Union. The convergence is evaluated on the basis of three criterion units which are standing alone but fading into each other. It is the Nominal convergence including Maastricht criteria which have been stated in the Treaty on European Union, then Real convergence criteria and criteria which accompany the development of the Optimum Currency Areas Theory. The theoretical part gives the definitions of particular criteria and draw the attention to potential problems which can occur by their interpreting. In the practical part there are comparative characteristics used to analyze achieved state of the convergence in the Czech Republic in relation to EU countries and euro area countries. This part attends also to monitoring the current financial and economical crisis and it's impact on individual indicators.

This thesis focuses on analysis of current problems of so called "South wing countries" of EMU and Ireland (countries which are being called "PIIGS") from the theory of optimum currency area point of view. It uses the static and dynamic version of the theory as a framework for analyzing the problems of internal and external imbalance within those countries and mainly the connection between current accounts deficits, high level of private and public debts, loss of competitiveness in international trade and high percent of unemployment. The thesis comes with a conclusion that the main factors behind the crisis were inflation and inflation expectations which then through different inflation differentials created asymmetric shocks in monetary policy. This inflation differential phenomenon is described in Walters critique and with other theories creates the basis of analytical part. In the appendix it assesses the readiness of Czech Republic for accepting the euro, based on the analysis made in this thesis.

This thesis provides an assessment of monetary integration in the West African Monetary Zone (WAMZ) focusing upon its feasibility and trade implications, in order to inform policy about the group’s deep integration scheme. The first aspect of the original contribution of the thesis focuses on one of the main issues in the debate of the monetary union in the WAMZ, namely the degree of asymmetry in macroeconomic shocks. The study examines the real effective exchange rate (REER) behaviour among the prospective candidates to assess the degree of potential costs of giving up monetary policy autonomy. The evidence reported from VECM, impulse response and variance decomposition analysis points to heterogeneous economies. Therefore, idiosyncratic shocks imply the need for different policy responses to adjust to macroeconomic shocks. The findings strengthen the case for policy autonomy in the region. The second aspect of original contribution of the thesis evaluates the potential effect of a common currency on trade among WAMZ member countries. Using the existing currency union in ECOWAS, the CFA franc zone, the chapter estimates the effect of a common currency on bilateral trade over the period 1980-2016 using the gravity model. The main conclusion reached is that membership of the CFA franc zone has promoted bilateral trade among members by 60%. The findings support the hypothesis that a common currency increases bilateral trade, which is a helpful guide for a WAMZ monetary union. In summary, the thesis demonstrates that in the long term, a common currency would promote intra-community trade, but at present, a monetary union is not feasible due to asymmetric macroeconomic shocks. Therefore WAMZ deep integration scheme would require members instituting adequate alternative adjustment mechanisms such as fiscal transfer schemes. / Ghana Education Trust Fund (GETFund) for the financial support and Division of Economics (now Accounting, Finance and Economics Group) for the offering of the Graduate Teaching Assistant Studentship

Made available in DSpace on 2016-04-26T20:48:59Z (GMT). No. of bitstreams: 1 Elcio Mitsuhiro Ito.pdf: 840981 bytes, checksum: 47ca5e0b9bbf2d22790cfd1c3800a15e (MD5) Previous issue date: 2009-12-21 / This research analyzes the development of the financial integration in the euro area, a decisive process for the consolidation of the new common currency and the European Union itself. Since the beginning of the monetary union process, it was assigned to the financial integration the fundamental role for the countries to extract the maximum benefits from the monetary union with the least cost possible. Given the low labor mobility and lack of fiscal coordination within the euro zone, the financial integration received special attention as a mechanism to soften macroeconomic asymmetric shocks via reallocation of resources among segments and companies in the financial markets. Moreover, financial integration allows a more efficient transmission of monetary policies and also allows risk sharing within the monetary union. As a result, new members to the European Union do not necessarily need to wait to have symmetric business cycles before joining the euro. This research presents a selective review of main studies about measuring of financial integration and its current situation in the various segments of the financial markets in the euro area. We conclude that material improvements in the financial integration have been achieved after 10 years of the euro however further challenges are still present mainly in the stock market and retail banking sectors. The recent financial turmoil, which was originated in the U.S. during mid 2007, has resulted in inflexion of the trend in some financial integration indicators but it is still premature to affirm whether this is a trend reversal or a temporary movement / A dissertação analisa o desenvolvimento da integração financeira na área do euro, processo decisivo para a consolidação da nova moeda e da própria União Européia. Prevista desde o início do processo de unificação monetária, foi atribuído à integração financeira papel fundamental para que os países do bloco consigam obter o,máximo de benefícios da união monetária, com o menor custo possível. Diante da baixa mobilidade do mercado de trabalho e das dificuldades para a coordenação políticas fiscais na Europa do euro, a integração financeira ganhou destaque como um caminho para atenuar e suavizar os choques macroeconômicos assimétricos, por meio da realocação de recursos entre setores e empresas nos mercados financeiros. Além disso, a integração do mercado financeiro possibilita a transmissão mais eficiente da política monetária única e permite a diversificação de risco dentro de área monetária. Uma decorrência importante é que novos países da comunidade européia não precisariam esperar necessariamente por uma maior simetria dos ciclos de negócios para se unirem ao euro. A dissertação apresenta uma revisão dos principais referenciais sobre mensuração da integração financeira e seu atual estágio nos diversos segmentos dos mercados da área do euro. Conclui-se que houve avanços importantes na integração financeira em vários mercados ao longo de dez anos, maiores dificuldades para o avanço da integração em alguns deles, em especial o mercado de ações e o mercado bancário de varejo. A recente crise financeira mundial, que se originou nos Estados Unidos em meados de 2007, reverteu a tendência de alguns indicadores de integração financeira, mas é prematuro afirmar se a reversão de tendência se manterá ou se há apenas uma retração temporária

From recent research on optimum currency areas it is clear that the European Monetary Union does not represent an optimum currency area. Since 2008 the countries of southern part of the eurozone have found themselves in a financial, economic and debt crisis. Therefore a question about the economic importance of splitting the European Monetary Union arises. The aim of this thesis is to give answer to the question of how to divide the eurozone so that the newly formed monetary unions could be considered optimum currency unions, alternatively, so that the newly formed monetary unions are more optimal than currently the eurozone is. Using the method of analysis and synthesis we have reached a decision to divide the eurozone into two parts. One part comprising the southern countries -- Portugal, Spain, Italy, Greece, Malta and Cyprus and the other part comprising the rest of the eurozone.