In the late 1980s and the 1990s, as plans for Economic and Monetary Union (EMU) in Europe were taking shape, extensive research was devoted to the economics of monetary union. This research drew on the insights from the Optimum Currency Area literature as well as on other strands of the economic literature (economics of exchange rate regimes, public finance, etc..). This research evaluated the costs and benefits of EMU and made recommendations for its design as well as for policy actions to be implemented at national level.
The euro crisis today leads to revisit this literature in the light of recent developments. The key question to investigate is to what extent the crisis can be regarded a mere confirmation of the concerns voiced by a number of academics in the run-up of the euro, in which case the issue is one of policy action rather than of research; and to what extent developments observed in recent times were unanticipated, in which case they call for new research into the economics of EMU. In other words, the purpose of the seminar is to sort out the “unknown unknowns” from the “known unknowns” of EMU.
To this end the seminar will review the “old” (pre-crisis) and the “new” (current) literature on monetary union in Europe with the aim of determining which features of the crisis can be analysed with the analytical toolkit of the 1990s and which call for the rethink of the toolkit.