The course covers 4 main topics taught in 12 lectures:

1. Introduction to economics of integration

2. Economic theory of integration forms, customs union, common market and monetary union

3. Redistribution and common economic policies in the EU

4. Institutional economics of the European integration

 

Intuitive division by lectures:

 

Lecture 1: Introduction to economics of integration - 1

BASIC CONCEPTS

- Concepts of economic integration

- Global and regional integration

- Forms of economic integration: preferential tariff agreement, free trade area, customs union, single market, common market, economic union, economic and monetary, political union

- Effects of economic integration, trade creation and trade diversion

 

Lecture 2: Economic theory of integration forms - 2

 WELFARE EFFECTS OF TRADE

- Marshallian surplus. Consumers' surplus and producers' surplus.

- Measuring welfare effects, a partial equilibrium approach. Welfare effects of free trade and of trade protection. Tariffs and quotas.

- Multi-commodity markets. Closed equilibrium and welfare analysis on a multi-commodity market.

 

Lecture 3: Economic theory of integration forms - 3

TRADITIONAL THEORY OF THE CUSTOMS UNION - A PARTIAL EQUILIBRIUM APPROACH

- Viner's theory of customs union. Trade diversion and trade creation.

- Partial equilibrium model: 1 commodity, customs union of a small country and a big country.

- Tariff reduction vs. customs union. 1 commodity, customs union of 2 small countries.

- Welfare effects of customs union.

 

Lecture 4: Economic theory of integration forms - 4

THE THEORY OF COMMON MARKET - FREE MOBILITY OF PRODUCTION FACTORS

- Common market and single market

- Free mobility of non-labor production factors

- Partial market and general equilibrium approach

- Welfare effects of free mobility

 

Lecture 5: Economic theory of integration forms - 5

 THE THEORY OF COMMON MARKET - FREE MOBILITY OF LABOR

- Free mobility of labor, neoclassical solution

- Propensity to migration

- Welfare effects of free mobility of labor

- Migration in the EU

 

Lecture 6: MIDTERM EXAM

 

Lecture 7: Redistribution and common economic policies - 1

EU’S BUDGET

- Budgetary rules.

- Budgetary revenues and expenditures.

 

Lecture 8: Redistribution and common economic policies - 2

 EU’S REGIONAL REDISTRIBUTION

- Redistribution

- Regional policies and political economy of regional redistribution

- Measuring regional disparities

 

Lecture 9: Environmental Policies of the EU - 1

- EU and the environment

- Emissions and sustainable development

- Economic aspects of the environmental policies in the EU

 

Lecture 10: Redistribution and common economic policies - 2

 COMMON AGRICULTURAL POLICY

  - Why regulation of agricultural markets?

 - Income elasticity of demand for food.

 - Price elasticity of supply and demand for food and market adjustment.

 - Common agricultural policy and welfare effects of regulation.

 - Problems and reforms of CAP.

 

Lecture 11: Institutional economics of European integration - 1

 SYSTEM OF EUROPEAN INSTITUTIONS AND LEGISLATIVE PROCEDURES

 - European Union institutions, Commission, Council of Ministers, European Parliament.

 - Legislative procedures in the EU. Qualified majority, consultation procedure and co-decision procedure.

 - National and institutional influence in the EU.

 - Lisbon Treaty.

 

Lecture 12: Institutional economics of European integration - 2

 MEASURING INFLUENCE IN COMMITTEE SYSTEMS

 - Models of committee systems.

 - Measuring influence, voting power indices methodology.

 - Voting power of EU decision making actors: institutions, member states and European political parties in EU of 27.

 

 

Literature:

 

There is no single textbook fully covering all topics of the course. Students can draw from various textbooks and sources.

Main sources:

 

·         Baldwin, R. and Wyplosz, C.: The Economics of European Integration. McGraw-Hill Higher Education, 2003.

·         Krugman, P. and Obstfeld, M.: International Economics: Theory and Policy. Pearson - Addison Weasley, 2006.

·         Molle, W.: The Economics of European Integration. Dartmouth Publ. Comp., Aldershot, 1996.

·         Pelkmans, J.: European Integration, Methods and Economic Analysis. Addison Wesley Longman Limited, New York, 1997.
 

Additional sources:

 

·         Pelkmans, J.: European Integration, Methods and Economic Analysis. Addison Wesley Longman Limited, New York, 1997.

·         Turnovec, F.: Political Economy of European Integration. Karolinum, Prague, 2003.

·         Svendsen, G. T.: The Political Economy of the European Union. Edward Elgar, Cheltenham, 2003.

·         Journal of European Integration

·         European Journal of Political Economy

·         Duff, A.: The Treaty of Amsterdam. Sweet and Maxwell, London, 1997.

·         Molle, W.: The Economics of European Integration. Dartmouth Publ. Comp., Aldershot, 1996.

·         Swann, D.: European Economic Integration. The Common Market, European Union and Beyond. Edward Elgar, 1996.

·         Other texts recommended during the lectures.