Rosaria Rita Canale - Böcker

This book offers a criticalperspective from which to observe evolution of the Euro Area and the EuropeanUnion in these times of growing economic and political conflict. Keyimplications of design failures in the Euro Area (i.e. incorrect diagnostics ofthe public finance crisis, single monetary policy failure, heterogeneousmacroeconomic environment, asymmetry in macroeconomic policies, obstacles forpolicy coordination) and their contribution to the excessive external andinternal economic imbalances will be critically discussed from the economic,policy and institutional perspectives. This critical insight is used to examineboth institutional asset and economic performance of Europe after the crisis,moving from the authors’ shared perspective that the crisis revealed the weakaspects of the whole architecture of the European Union.The economic crisis revealed theexistence of different forms of imbalances inside the Eurozone and highlightedthe flaws of the institutional architecture of economic policy in Europe. Thegreater fragility of some countries in respect to others has triggered abackward process in which national interests have started to prevail over thoseof both the currency area and the entire European Union. In turn, this hasfuelled a progressive decline in confidence in the European institutions and iscreating growing questions of interpretation both in terms of economic theoryand institutional asset. This book focuses on these issues and on the degree oflegitimacy of the European institutions resulting therefrom. It aims toinvestigate the nature and validity of the European integration processemphasizing limits and challenges arising from it.

Following the 2008 financial crisis, the Eurozone faced a major challenge to many of its most widely held beliefs around both short- and long-term economic policy. Contrary to what had been the received wisdom, it suddenly became clear that financial institutions can fail, that low interest rates are often unable to stimulate the economy, that the unemployment gap is still very large, and that external and internal imbalances are becoming more entrenched. Such sudden revelations left economists grasping for answers. Rosaria Rita Canale and Rajmund Mirdala outline the economic orthodoxies that led to such massive blind spots, and they shed light on the emerging paradigms that continue to struggle to offer convincing frameworks that address what happened and what to do next. They show how dominant economic theories led to a progressive devaluing of the idea that coordinated economic policy offers an effective way of maintaining macroeconomic equilibrium, and they illustrate how the new economic environment calls for a new role for economic policy, one that allows for a more maneuverable monetary policy and a more active fiscal policy. What they ultimately suggest is that this renewed framework of cooperation among policy instruments would require a general rethinking of the political equilibria within the Eurozone, as a stable economic environment cannot be maintained at the expense of particular countries. For its systematic analyses of the economic policy framework of the Eurozone, and for the rigor of its critiques of current ideas about how to move forward, Fiscal and Monetary Policy in the Eurozone is essential reading for postgraduate students of economics, and it is of keen interest to researchers, policymakers, journalists, and financial strategists.