Economics of European Integration 6th edition

1265 Pages·2019·12.033 MB·English

by  Richard Baldwin, Charles Wyplosz

page i
The Economics of European Integration

page ii
page iii
The Economics of European Integration
Sixth edition
Richard Baldwin & Charles Wyplosz
page iv
The Economics of European Integration, Sixth edition
Richard Baldwin & Charles Wyplosz
ISBN-13 9781526847218
ISBN-10 1526847213
Published by McGraw-Hill Education
8th Floor
338 Euston Road
London
NW1 3BH
Telephone: [phone]
Website: www.mheducation.co.uk
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
The Library of Congress data for this book has been applied for from
the Library of Congress
Portfolio Manager: Matthew Simmons
Content Developer: Nicola Cupit
Content Product Manager: Ali Davis
Marketing Manager: Geeta Chandolia
Cover design by Adam Renvoize
Published by McGraw-Hill Education. Copyright © 2019 by McGraw-
Hill Education. All rights reserved. No part of this publication may be
reproduced or distributed in any form or by any means, or stored in a
database or retrieval system, without the prior written consent of
McGraw-Hill Education, including, but not limited to, in any network
or other electronic storage or transmission, or broadcast for distance
learning.
Fictitious names of companies, products, people, characters and/or
data that may be used herein (in case studies or in examples) are
not intended to represent any real individual, company, product or
event.
© 2019. Exclusive rights by McGraw-Hill Education for manufacture
and export. This book cannot be re-exported from the country to
which it is sold by McGraw-Hill Education.
page v
Dedication
For Sarah, Ted, Julia and Nicky – R.B.
In memory of my parents, whose sufferings inspired my yearning for
a Europe at peace, and who taught me the pleasure of learning –
C.W.
page vi
Brief Table of Contents
About the Authors xiii
Preface xiv
Acknowledgements xviii
Guided Tour xix
Online Learning Centre xxi
Study Skills xxiii
Part I

History, Facts and Institutions 1
 1 History 3
 2 Facts, law, institutions and the budget 39
 3 Decision making 71
Part II

The Microeconomics of European Integration 95
 4 Essential microeconomic tools and tariff analysis 97
 5 The essential economics of preferential liberalization 119
 6 Market size and scale effects 143
 7 Growth effects and factor market integration 159
 8 Economic integration, labour markets and migration 177
Part III

EU Micro Policies 203
 9 The common agricultural policy 205
10 Location effects, economic geography and regional pol2ic3y1
11 EU competition and state aid policy 255
12 EU trade policy 275
Part IV

The Macroeconomics of Monetary Integration 287
13 Essential macroeconomic tools 289
14 The history of European monetary integration 323
15 Optimum currency areas 347
Part V

EU Monetary and Fiscal Policies 379
16 The European monetary union 381
17 Fiscal policy and the Stability Pact 413
18 The financial markets and the euro 443
19 The Eurozone in crisis 475
Index 511
page vii
Detailed Table of Contents
About the Authors xiii
Preface xiv
Acknowledgements xviii
Guided Tour xix
Online Learning Centre xxi
Study Skills xxiii
Part I History, Facts and Institutions 1
Chapter 1 History 3
1.1  Early post-war period 4
1.2  Two strands of European integration: federalism and
intergovernmentalism 9
1.3  Evolution to two concentric circles: the domino effect part I 15
1.4  Euro-pessimism 17
1.5  Deeper circles and the domino effect part II: the Single Market
Programme and the EEA 18
1.6  Communism’s creeping failure and spectacular collapse 21
1.7  Reuniting East and West Europe 23
1.8  Preparing for eastern enlargement: a string of new treaties 23
1.9  Global and Eurozone crises and institutional responses 26
1.10 The rise of Euroscepticism 29
1.11 Summary 35
Self-assessment questions 36
References and further reading 37
Chapter 2 Facts, law, institutions and the budget 39
2.1  Economic integration in the EU 40
2.2  EU structure pre- and post-Lisbon 46
2.3  EU law 49
2.4  The ‘Big-5’ institutions 52
2.5  Legislative processes 58
2.6  Some important facts 61
2.7  The budget 63
2.8  Summary 67
Self-assessment questions 68
References and further reading 69

page viii
Chapter 3 Decision making 71
3.1  Task allocation and subsidiarity: EU practice and principles 72
3.2  Understanding the task allocation: the theory of fiscal federalism
75
3.3  Economic view of decision making 82
3.4  The distribution of power among EU members 86
3.5  Legitimacy in EU decision making 90
3.6  Summary 90
Self-assessment questions 91
References and further reading 92
Part II The Microeconomics of European Integration 95