Common market in capital and in services: FDIs and capital flows

The course presents principles of capital flow liberalization in the EU. In particular, its aim is to give the economic perspective of common market in capital flows and in services. It provides a rich theoretical background for understanding the role of capital flows for economic growth and financial stability in the recipient countries as well as it discusses the empirical evidence in the EU case. In particular, the euro area crisis is critically analyzed within various frameworks.

The detailed content of the course:

1. Economic growth, capital and capital flows: general conceptual frameworks, EU application

2. Classification of capital flows

3. Foreign direct investments

4. Trade in services

5. Financial system and integration; Portfolio and banking flows

6. Modern banking system in Europe; core-periphery capital flows

7. The financial crash and systemic risk with application to Europe

8. Solvency vs liquidity and Greek sovereign debt crisis

9. Private and public debt interactions

10. The flight to safety – capital flows during the euro area crisis

11. Whatever it takes – the role of monetary policy in solving the euro area crisis

Routledge Handbook of the Economics of European Integration, ed. by H. Badinger and V. Nitsch

The economics of European Integration, R. Baldwin and C. Wyplosz, 3rd edition

The economics of European Integration. Theory, practice, policy, W. Molle, 5th edition

A Crash Course on the Euro Crisis, M.K. Brunnermeier and R. Reis, working Paper and slides

Capital flows and crises, B. Eichengreen

Core textbook, available online