Study programmes / C-EM Economics and Management / Theory of Economic and Monetary Integration
Course code:TEI
Course title in language of instruction:Teorie měnové integrace
Course title in Czech:Teorie měnové integrace
Course title in English:Theory of Economic and Monetary Integration
Mode of completion and number of credits:Exam (6 credits)
(1 ECTS credit = 28 hours of workload)
Mode of delivery/Timetabled classes:full-time, 2/2; part-time, 16/0
(full-time, hours of lectures per week / hours of seminars per week; part-time, lectures per period / seminars per period)
Language of instruction:Czech
Level of course:master continuing
Semester:SS 2018/2019 - FBE
Name of lecturer:prof. Ing. Lubor Lacina, Ph.D. (supervisor)
Prerequisites:Intermediate Macroeconomics or Makroekonomická analýza
Aims of the course:The course introduces basic theory of optimum currency area (monetary union). The historical background of European monetary integration and eurozone crises during years 2008 - 2014 is also briefly described. The core of the course is aimed at analyses of the theory of monetary integration, fiscal policy and the role of European Central Bank within European Monetary Union.
Course contents:
1.Theory of Economic and monetary integration (allowance 2/2)
a.Steps of economic and political integration in West Europe - from custom to monetary union
b.The influence of EURO introuction on business operations

2.The Economics of Monetary Integration - cost and benefits analysis (allowance 4/4)
a.Costs and Benefits of Monetary Union
b.Different Preferences of Countries about Inflation and Unemployment
c.Different Fiscal Systems and the Seigniorage Problem

3.Asymetric Shocks and Monetary Union (allowance 2/2)
a.Macroeconomic Shocks - Symetric - Asymetric
b.Asymetric Schocks and its Specifics
c.Importance of Asymetric Shocks in Monetary Union and its Adjustment

4.The Theory of Optimum Currency Areas: A Critique (allowance 4/4)
a.Devaluation, Time Consistency, and Credibility
b.The Cost of Monetary Union and the Openness of Countries

5.Cost and Benefits Compared (allowance 2/2)
a.Monetary Union, Price and Wage Rigidities, and Labour Mobility
b.Asymmetric Shocks and Labour Market Flexibility
c.Costs and Benefits in the Long Run

6.The transition to a Monetary Union (allowance 2/2)
a.The Maastricht Treaty
b.Problems with the Maastricht Streategy
c.Alternative Transition Scenarios

7.The Design of a European Central Bank and its Monetary Policy (allowance 4/4)
a.The Design of the ECB
b.Political Independence and Inflation
c.Monetary Policy and Instruments of ECB

8.Entrance of new members to EMU (allowance 2/2)
a.Potential scenarios
b.How to Organize Realtions between the "Ins" and "Outs"?
c.Czech Republic - evaluation

9.Fiscal Policies in Monetary Unions (allowance 2/2)
a.Fiscal Policies and the Theory of Optimum Currency Areas
b.Fiscal Discipline in Monetary Unions
c.Risks of Default and Bailout in a Monetary Union

10.Eurozone Crisis and its Future (allowance 4/4)
a.Ex-ante Coordination of Economic Policies
b.Banking Union
c.Political Union

Learning outcomes and competences:
Generic competences:
-ability to analyse and synthesize
-ability to solve problems
-ability to work in international context
-ability to work independently
-capacity to adapt to new situations
-communication in second language
-science and research skills

Specific competences:
-Ability to predict future changes of basic macroeconomic indicators
-Student study the main thesis of the optimum currency area theories
-To accommodate their decisions to the recent changes in international economic policy
-Understanding to the basic principles of monetary policy decision making process

Type of course unit:required
Year of study:Not applicable - the subject could be chosen at anytime during the course of the programme.
Work placement:There is no compulsory work placement in the course unit.
Recommended study modules:none
Assessment methods:Three partial written tests (60 % of the total mark) during semester and oral exam (40 % of the total mark). 28 hours lectures, 28 hours seminars, total 56 hours. 16 hours - distance students.
Learning activities and study load (hours of study load)
Type of teaching methodDaily attendanceCombined form
Direct teaching
     lecture28 h0 h
     practice28 h0 h
     consultation0 h16 h
     preparation for exam60 h130 h
     preparation for regular assessment30 h0 h
     writing of seminar paper22 h22 h
Total168 h168 h

Basic reading list
  • DĚDEK, O. DOBA EURA - Úspěchy i nezdary společné evropské měny. Praha: Linde Praha, 2013. 336 p. ISBN 978-80-7201-933-5.
  • LACINA, L. et al. Měnová integrace: náklady a přínosy členství v měnové unii. 1st ed. Praha: C.H. Beck, 2007. 538 p. ISBN 978-80-7179-560-5.
Recommended reading list
  • Economics of monetary union. 9th ed. Oxford: Oxford University Press, 2012. 1 p. ISBN 978-0-19-960557-6.
  • DĚDEK, O. Historie evropské měnové integrace: od národních měn k euru. Praha: C. H. Beck, 2008. 268 p. ISBN 978-80-7400-076-8.