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Updated A.Y. 2016-2017





















Master of Science in European Economy & Business Law

Economics of European Integration & Economic Integration and Structural Reforms


Economics of European Integration

Academic Year 2016-2017




The course introduces students to the economics analysis of European integration (PART 1) and economic integration and structural reforms (PART 2). The course will cover economic concepts, models and tools developed in the field of international economics and macroeconomics that are particularly suited to provide students with a better understanding the of the process of European integration and the structural reforms.


Students are expected to be familiar with basic microeconomics and macroeconomics concepts and models. A quantitative background is not strictly required, but students will benefit from knowledge of mathematics and statistics. The course is held in English.


Knowledge and Understanding: In-depth understanding of the integration process, of the economic implications of the integration process, of the treaties governing the economic functioning of the European Union and of monetary and fiscal policies (global financial crisis, euro sovereign debt crisis, fiscal compact, austerity). Deep understanding of the economic integration process on growth, spatial allocation of economic activity, cohesion and convergence. Knowledge of the role played by reforms on product and labor markets, of the importance of R&D activity and of human capital accumulation as engines of growth; understanding of the common agricultural policy; understanding and critical evaluation of the objectives of Europe 2020 economic strategy.

Applying Knowledge and Understanding: To give students familiarity with a broad range of European policy issues; to ensure a good knowledge of the economic grounding of European economic integration; to show students the usefulness of simple analytical models in understanding the relevant aspects of European integration and to give them the ability to apply these analytical tools intelligently. What is learned can be applied to other situations and to actual work in the context of European Institutions and/or National and local public administrations subject to European directives and regulations.

Making Judgements: What is learned can be used to assess critically and without prejudices the activity and the decisions of national and European policy makers.

Communication Skills: be able to rigorously present facts and complex mechanisms; learn how to present complex facts in a comprehensive manner and communicate the relative conclusions, knowledge and rationale to specialists and non-specialized audiences.

Learning Skills: The course aims at providing students with the tools necessary for future learning. At the end of the course students are expected to be able to read and understand official documents, scientific articles and databases. Students are also expected to be develop autonomous learning abilities.

It is expected that students work on their own to develop a sound understanding of the material through lecture notes, readings, and assignments.


Attendance is not mandatory, but highly recommended. Attending students are typically able to reap more benefits from the course and more easily meet the learning objectives. Additionally, attending students will be evaluated during the course, which provides a stronger incentive to familiarize with the material in due time, enhancing learning and often leading to more successful outcomes.

Punctuality is mandatory. Students must arrive in class on time and must not leave before the end of the class without a specific reason. It is the responsibility of the student to catch up on any missed work. Correct, active and responsible participation is insisted on. Proper behavior and dress code must be observed in class. Classrooms are to be left in order and clean. Students must take care of available equipment and materials and promptly report any damage and loss. Drinking/eating during class is not allowed. Electronic devices (cell phones, tablets, laptop computers, etc.) must be switched off during class, unless otherwise instructed.

Instructors who find a student's behavior is inappropriate will seek to talk with him/her promptly; if the issue continues, the instructor is required to contact the pertinent authority.

Attending Students: Students are classified as "attending students" if they miss no more than 5 classes in total. Attending students' presentations are full part of the course and attendance counts towards the "attending student" status. Names could be taken at the beginning and/or at the end of classes in order to verify attendance.

Non-attending Students: Students with more than 5 absences or who are involved in internships or are abroad for the Erasmus and the Overseas programme are classified as "non-attending students".


Academic integrity is of paramount importance, as trust between writers and their readers as well as between teachers and their students is the most fundamental asset for scientific knowledge and its transmission. Academic dishonesty include cheating on tests, plagiarism, improper citation, recycled work, unauthorized assistance, or similar actions. Assignments and projects are specific to individual courses; presenting the same work in two different courses (including previous courses) is considered recycling and is unacceptable. Students are required to submit written assignments in electronic format on the due date for plagiarism check.

Students who commit an act of academic dishonesty will receive a failing grade.


We do not have an open-door policy. Please respect the following office hours.

Enrico Marvasi: by e-mail appointment.

Barbara Annicchiarico: Friday from 13:00-14:00 during the first term, by e-mail appointment during the rest of the year.



Pre-exams are optional. Pre-exams are mainly devoted to attending students, yet non-attending students are allowed to take them if they wish. There is one pre-exam for each PART; two pre-exams in total. For PART 1, the pre-exam will be on week 6. For PART 2, the pre-exam will be on week 12. Each pre-exam length is 1 hour and 15 minutes. The minimum qualifying grade required to pass the pre-exam on each PART is 18/30. The grade for each passed (18/30 or above) PART can be preserved for the duration of the course session. Grades on each PART will be lost if you decide to take again the exam on the related PART.

Final Exam

The final exam is divided into two equally worth independent parts: i) Economics of European Integration; ii) Economic Integration and Structural Reforms. Exam length on each PART is 1 hour and 15 minutes; therefore, the final exam session will last 2 hours and 30 minutes. The minimum qualifying grade required to get credits for each PART is 18/30; students must get at least 18/30 on both PARTs to pass the course.


Each regularly attending student has the possibility to give a presentation on an assigned topic. Presentations will take place during the last two weeks of each PART (weeks 5-6 and 10-12). Presentation slots will be assigned randomly as well as topics. The presentation is worth 20% of the final grade; thus, for attending students, the final exam is worth 80% of the final grade, 40% for PART 1 and 40% for PART 2.

Non-attending students are not allowed to give a presentation; thus, for non-attending students, the final exam is worth 100% of the final grade; 50% for PART 1 and 50% for PART 2.

For more details, see the file Assignment available in the course material.


Please note that a grade of 30/30 represents an achievement that is outstanding relative to the level necessary to meet course requirements (students must show an excellent knowledge of the subject, all written work must be well written, competent and accurate; sloppiness of any kind will prevent a student from getting 30/30 as final grade, no matter if the student feels she/he is well prepared). Bargaining on grading is not allowed. Notice that grading is based on performance rather than effort. If you are not happy with the grade, just improve the performance.



This module will introduce the student to the economics of European integration from a mainly microeconomic perspective. The course covers the main international trade concepts, models and issues with both a theoretical and empirical perspective.

The class schedule may change throughout the course according to the class progress.


Presentation of the course

Review of basic international trade concepts
BW Ch. 1-5 

Ricardo and Heckscher-Ohlin
Market Size and Scale Effects

Handout & BW Ch. 6

Monopolistic competition

New Trade Theory

Handout & Kr (1980)

Growth and factor market integration

Handout and BW Ch. 7-8

Heterogeneous firms
The Happy Few

Me (2003) & MaO (2008)

Gravity model
New Economic Geography

Handout& BW Ch. 10

Common Agricultural Policy

BW Ch. 9

Foreign Direct Investments


Global Value Chains


Required Readings
1) Baldwin, Richard & Wyplosz, Charles (2015), The Economics of European Integration, 5th edition, McGraw Hill. [BW]
2) Handouts and all the material provided in class.
Suggested Readings
1) Del Gatto, M., Ottaviano, G. I.P., & Mion, G. (2006). Trade integration, firm selection and the costs of non-Europe. Mimeo.
2) Krugman, Paul (1980), Scale Economies, Product Differentiation and the Pattern of Trade. The American Economic Review, 70:950-959. [Kr (1980)]
3) Melitz, Marc (2003), The Impact of Trade on Intra-Industry Reallocation and Aggregate Industry Productivity. Econometrica, 71:1695-1725. [Me (2003)]
4) Mayer, Thierry & Ottaviano, G. I. P. (2008), The Happy Few: The Internationalization of European Firms. Bruegel Blueprint Series, 43(3), 135–148. [MaO (2008)]
5) Melitz, Marc & Ottaviano G.I.P. (2008), Market Size, Trade, and Productivity. Review of Economic Studies, 75: 295-316.
6) Puga, Diego (2002) European Regional Policies in Light of Recent Location Theories. Journal of Economic Geography, 2:373-406.
7) Mongelli, F. P., Dorrucci, E., & Agur, I. (2005). What does European institutional integration tell us about trade integration? ECB Occasional Paper, (40).
8) Bergstrand, J. (2008) How much has European economic integration actually increased members trade? VoxEU.org, http://voxeu.org/article/european-economic-integration-and-trade-how-big-was-boost
1) Antràs, Pol (2016), Global Sourcing. Princeton University Press.
2) Altomonte, Carlo & Nava, Mario (2006), Economics and Policies of an Enlarged Europe. Edward Elgar.
3) Boeri, Tito, Castanheira, Micael, Faini, Riccardo & Galasso, Vincenzo, (2006), Structural Reforms without Prejudices. Oxford University Press.
4) Gandolfo Giancarlo & Trionfetti Federico (2013), International Trade Theory and Policy. Springer.
5) Krugman, Paul (1991), Geography and Trade. The MIT Press.
6) Baldwin, R. E. (2006). In Or Out: Does it Matter?: an Evidence-based Analysis of the Euro's Trade Effects. Centre for Economic Policy Research.
7) Baldwin, R. E.  (2014). The impact of mega-regionals: Economic impact. In “Mega-regional Trade Agreements: Game-Changers or Costly Distractions for the World Trading System?” The World Economic Forum.