Sciences Po, Paris

Undergraduate Lecture, L2

European Economic Integration
Lecture: Farid Toubal

Teaching Assistant: Julien Martin

The aim of this lecture is to provide students with a comprehensive analysis of the economic rationale behind the European Economic Integration. This course gives students an understanding of the European Union (EU) and its political economy. The course will focus on the policy response of the EU to successive enlargement in particular the accession of Central and Eastern European countries. We analyse the costs and benefits of enlargement for the location of activities in the enlarged area. We examine the impact of enlargement on trade, migration and foreign direct investment. We analyse the position of EU vis-à-vis the rest of the world. In particular, we examine the impact of the emergence of EU as a major actor in international economic relations, while considering the recent impact of the World Trade Organisation on EU external trade. The analytical framework of the course draws on political economy concepts as well as those from the disciplines of economics, political science and international relations.

The main textbook is Baldwin and Wyplosz (BW, second edition). 

Specific readings will be listed for each lecture:

• Required readings marked by 2 stars (**) are required. 

• The aficionado's corner is dedicated to those students who want to improve their knowledge with advanced material. These readings are taken from BW  and students may find them rewarding! 

• Please click the Green Areas to download materials. Download the syllabus here.

Find a list of topics for your essay here!

Part I: Facts and Institutions

I. Facts, Law Institution and the budget (Print)

• –BW, Chapter 2

• **Read The Treaty of Nice: Goal and Achievements. Baldwin, R. E., Berglof, F., Giavazzi and M., Widgren (2001). Nice Try: should the treaty of Nice Be Ratified? CEPR, London 

Aficionado's corner: R. Baldwin (2005). Who finances the Queen's CAP payments?

II. Decision Making (Print)

• –BW, Chapter 3

• **Baldwin, R and M., Widgren (2005). The impact of Turkey 's membership on EU voting. CEPS Policy Brief No.62. Published in Turkey: Economic Reform and Accession to the European Union, Bernard Hoekman and Sübidey Togan (eds), 2005, Oxford University Press and CEPR. (published version).

• **Baldwin, R and M., Widgren (2005) . Political Decision Making in the Enlarged EU. Paper presented at XVII Symposium Moneda y Crédito, on The future of the enlarged European Union, Madrid , November 18-19, 2004.

• Spillovers and diversity of preferences (Print)

Aficionado's corner: Baldwin R., (2006). Trail to Failure: History of the Constitutional Treaty's rejection and implications for the future.

Part II: EU Enlargement

III. Trade Creation and Diversion in the Enlarged Area (Print) (2 lectures)

• **BW, Chapter 5;  HHN, Chapter 2; Agraa, Chapter 5 

• **Bergstrand J-H., (2008). How much has European economic integration actually increased members’ trade? On Vox-EU

• **Chen, N. and D. Novy, (2009). Many trade barriers remain high in the EU. On Vox-EU.

• Winter, A. on Non-Tariff Barriers

Aficionado's corner: DeRosa D.A and G-C Hufbauer (2007). What do gravity models tell us about PTAs impact on trade flows: More creation or more diversion? On Vox-EU

IV. Cultural Proximity and Trade in the EU (Print)

• **Felbermayr G. and F. Toubal (2008). Cultural proximity and trade: evidence from Eurovision. On Vox-EU
• **Algan Y., and P. Cahuc (2007). Social attitudes and economic development.  On Vox-EU

Aficionado's corner: Fernandez R. (2007). Culture and Economics. New Palgrave Dictionary of Economics, 2nd edition.

V. Competition Effects and Industrial Restructuring (Print)

• BW, Chapter 6

• **European Commission (2002). The Macroeconomic effect of the SMP after 10 years. On the Web

• * Bertola, G., (2007). Freedom, rules and services markets integration. On Vox-EU.

Aficionado's corner:  Allen, C., Gasiorek M., Smith A., (1998). The Competition Effects of the Single Market in Europe. Economic Policy, October 13 (27): 440-486.

Part III: Factors Mobility and Economic Geography

VI. Migration in Europe (Print)

• BW, Chapter 8

• *Fachinni G., and Mayda A.M., (2008). From Attitude toward immigration to immigration policy outcomes: does public opinion rule?  On Vox-EU.
• *Hatton, T., (2008). Can EU immigration policy seclect for skill? On Vox-EU
  

Aficionado's corner:  **Boeri, T., and Brücker., H., (2005) Why are Europeans so tough on Migrants? Economic 

VII. Economic Geography and Regional Policies (Print)

• BW, Chapter 10

• Discussion in class: "Natural cluster: are policies promoting agglomeration necessary? Martin P., Mayer T., and  F., Mayneris (2008)"

Textbooks

[BW] Baldwin, R., and Wyplosz, C., (2009). The Economics of European Integration, McGraw-Hill. 3rd Edition.

[HHN] Hansen, J.D., Heinrich, H., and Nielsen, J.U., (1992). An Economic Analysis of the EC 1rst edition, McGraw-Hill.

Other  Manuals

El-Agraa, A., M., (2007). The European Union, Economics & Policies. 8th Edition, financial Times Prentice Hall. 

Molle, W. (2001) The Economics of European Integration. 4th Edition, Ashgate Publishing Limited.

Pelkmans, J. (2001) European Integration: Methods and Economic Analysis (2nd edition), Financial Times-Prentice Hall.

Usefull Links

Link to Julien Martin's tutorial page

Correction of the Midterm

Midterm's grades