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Learning Objectives

Deep understanding of the functioning of the monetary markets in closed and in open economy; knowledge of the determinants of exchange rates and of currency crisis models; understanding the theory of optimum currency areas, and costs and the benefits of monetary unions; comprehension of the transition process towards a monetary union and of the fragility of incomplete monetary unions; in-depth understanding of the role of the ECB, and of the role of the euro in international markets; comprehension of the economic implications of the rules and treaties governing the economic functioning of the EMU and of the related implications for the conduct of monetary and fiscal policies (euro crisis, fiscal rules, sovereign debt crisis); understanding the importance of reforms to complete the monetary union.

Learning of an analytical and quantitative approach for economic analysis so to strengthen what already learned during the first cycle and be able to apply these tools in an innovative way, also in research contexts.

To give students familiarity with a broad range of European monetary and fiscal policy issues; to ensure a good knowledge of the economic grounding of the European monetary integration and of the related fragilities; 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.

•What is learned can be used to assess critically and without prejudices: i) the activity and the decisions of national and European policymakers; ii) the reforms on the agenda. Students will be able to understand novel and complex problems related to the process of economic integration and speculate on future evolutions of the EMU.

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

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.
Special attention will be given to help students develop their soft skills, such as flexibility, integrity and work ethic, positive attitude, responsibility, teamwork and interpersonal skills. I


Students are expected to be familiar with basic microeconomic and macroeconomic concepts and models, and with elements of game theory.


1) Elements of monetary economics
2) Exchange rates, uncovered interest parity and perfect capital mobility
3) Monetary policy in open economy and currency crisis
4) The costs and the benefits of common currency
5) The theory of optimal currency areas
6) The fragility of incomplete monetary unions
4) The process of European monetary integration
a) History (Bretton Woods, Europe's snake, the European Monetary System, the crisis of
b) Maastricht criteria and convergence
c) The transition towards the EMU
5) The European Central Bank
a) Objectives, instruments and strategy
b) Non-standard measures
c) Benefits of price stability
d) Scope of monetary policy
e) The transmission mechanism of monetary policy
f) Independence and accountability
g) One currency and many inflation rates
6) Fiscal policy in monetary unions
a) Interactions between monetary and fiscal policies
b) Fiscal sustainability
c) Fiscal constraints in the EMU
d) Risks of default and bailout in a monetary union
6) The Eurozone crisis
a) The contagion from the US
b)The sovereign debt crisis
c) The ECB's pesponse to the financial crisis
d) Euro Area fiscal policies and the crisis
7) The future of the Eurozone


Baldwin, Richard and Wyplosz, Charles (2019), The Economics of European Integration, 6th edition, McGraw Hill.
De Grauwe Paul (2018), The Economics of Monetary Union, 12th edition, Oxford University Press.


Blanchard, O., Amighini A., Giavazzi F., (2015), Macroeconomics, A European Perspective,2nd edition, Pearson.
Eichengreen B., (2010), The Breakup of the Euro Area, in Europe and the Euro (A. Alesina and F. Giavazzi, editors), The University of Chicago Press.
Eichengreen, B., Wyplosz C., (1998) The Stability Pact: more than a minor nuisance?, Economic Policy, CEPR & CES & MSH, vol. 13(26), pages 65-113, 04.
Eichengreen, B., Wyplosz, C., (2016). Minimal Conditions for the Survival of the Euro. Intereconomics, 51(1), pp.24-28.
Kenen, P. (1969) The Theory of Optimum Currency Areas: An Eclectic View, in R.Mundell and A. Swoboda eds, Monetary Problems of the International Economy, The University of Chicago Press.
Krugman P. (2012) The revenge of optimum currency area, Chapter in NBER book NBER Macroeconomics Annual 2012, Volume 27 (2013).
Mundell, R. (1961) A theory of Optimum Currency Areas, American Economic Review, 51 (4).
Obstfeld M., (1996) Models of Currency Crises with Self-Fulfilling Features, European Economic Review, vol. 40, pp. 1037-1047
Wyplosz, C. (2006). European Monetary Union: the dark sides of a major success, Economic Policy, CEPR & CES & MSH, vol. 21(46), pages 207-261,

Teaching methods

Teaching methods
- Lectures
- Tutorials with active student participation
- Case studies and discussions

Learning methods
- Active class participation
- Taking notes in class
- Search for study material in the library and on-line
- Studying the assigned basic readings on textbooks, handouts and journal articles
- Reading and studying official documents (treaties, directives, regulations, reports etc...)

Exam Rules

Written and oral exam on the whole programme.

Grading policy and assessment criteria
Grading is based on the Italian Grading System ranges from 18/30 to 30/30. Specifically, the highest mark is 30/30 with distinction (defined as “lode” in Italian), while the lower is 18/30. Exams under 18/30 are considered as “not passed”.
The written and oral exams evaluate the overall preparation of the student, the ability to integrate (and connect) the knowledge of the different parts of the program, the consequentiality of the reasoning, the analytical capacity, and the autonomy of judgment. As additional criteria, the property of language and clarity of presentation, in accordance with the general and the specific learning outcomes already described in this form (i.e., knowledge and understanding; ability to apply knowledge and understanding; autonomy of judgment; learning skills; communication skills), will be taken into consideration.