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Beyond the economics of the euro - analysing the institutional evolution of EMU 1999-2010, September 2011

Author

Listed:
  • Salines, Marion
  • Glöckler, Gabriel
  • Truchlewski, Zbigniew
  • del Favero, Paola

Abstract

This Occasional Paper examines how and why the institutional framework governing EMU has evolved since the creation of the euro. Building on theories of institutionalism, the paper in particular investigates to what extent functional spillovers from the single currency into other policy domains, like macroeconomic policies or financial regulation, met with an adequate institutional response, and to what extent the existing institutional framework conditioned the response to the financial crisis. The interaction between policy requirements and institutional capabilities is examined both in “ordinary times” (1999-2007) and under “crisis conditions” (2007-10). The paper uses a typology of change which helps to put into perspective both the resilience of the institutional framework of EMU and its capacity to adapt. In this respect, it allows for a better understanding and framing of the current reforms of EMU economic governance. It concludes that even though the crisis will accelerate institutional development, it will do so only gradually, as path dependence and an inbuilt bias towards incremental change will prevent policy-makers from pursuing a “clean slate” strategy. JEL Classification: E52, E31, D84

Suggested Citation

  • Salines, Marion & Glöckler, Gabriel & Truchlewski, Zbigniew & del Favero, Paola, 2011. "Beyond the economics of the euro - analysing the institutional evolution of EMU 1999-2010, September 2011," Occasional Paper Series 127, European Central Bank.
  • Handle: RePEc:ecb:ecbops:20110127
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    File URL: http://www.ecb.europa.eu/pub/pdf/scpops/ecbocp127.pdf
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    References listed on IDEAS

    as
    1. Salvador Barrios & Andrea Schaechter, 2008. "The quality of public finances and economic growth," European Economy - Economic Papers 2008 - 2015 337, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Orion Lewis & Sven Steinmo, 2007. "Taking Evolution Seriously," ARENA Working Papers 19, ARENA.
    3. repec:cup:apsrev:v:94:y:2000:i:02:p:251-267_22 is not listed on IDEAS
    4. Lucia Quaglia, 2009. "The 'British Plan' as a Pace-Setter: The Europeanization of Banking Rescue Plans in the EU?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 1063-1083, November.
    5. Streeck, Wolfgang & Thelen, Kathleen (ed.), 2005. "Beyond Continuity: Institutional Change in Advanced Political Economies," OUP Catalogue, Oxford University Press, number 9780199280469.
    6. Jean Pisani-Ferry, 2010. "Euro area governance: What went wrong in the euro area? How to repair it?," Policy Contributions 410, Bruegel.
    7. Lucia Quaglia & Robert Eastwood & Peter Holmes, 2009. "The Financial Turmoil and EU Policy Co-operation in 2008," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 63-87, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Michal Jurek & Pawel Marszalek, 2015. "Policy alternatives for the relationship between ECB monetary and financial policies and new member states," Working papers wpaper112, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

    More about this item

    Keywords

    EMU institutional architecture; historical institutionalism; institutional change.; rational choice;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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