Economic and Monetary Union 4003-104UGW

The lecture is prepared for students who have received credits in basic micro, macroeconomics and basic theory of international trade only. That is why the lecture begins with the basic exchange rates theory and balance of payments theory. Next theory of cammon currency area is presented, institutions rules of the game of the EMU and short evaluation of the functionong of the euroland.

The Road to Maastricht. Why monetarny union ? From economic integration to monetary union or vice versa ? What is it an exchange rate? Foreign exchange market. Exchange rates systems. Functioning of the various exchange rates systems from the perspective of the interests of a firm. Foreign exchange risk. How to eliminate some of the risk of currency fluctuations. Balance of payments. Balance of payments deficyt and its economic consequences. Monetarny and absorption approaches to the balance of payments. Exchange rate and the balance of payments equilibrium. Cammon currency /optimum currency/ area theory. Costs and beneficts of such an area. The problem of fiscal federalism. Institutions and operations if the EMU. What can be learned from the EMU experience ?