POLI 243 Lecture 18: HENNING – Reading Notes .docx

• School: McGill University
• Department: Political Science
• Course: POLI 243
• Professor: Mark Brawley

Document Summary

Integration: the case of europe reading notes. Puzzle: seeking to theorize and explain the european monetary integration using its international/systemic context as opposed to most literature, which has sought to explain it using regional economic interdependence, political integration, issue linkage and institution, and domestic politics. Reduction of internal trade barriers positive spillover for monetary integration: capital mobility constrains the choices of states in monetary policy. In the face of high capital mobility, assets the famous unholy trinity/trilemma . States must choose between monetary autonomy and exchange rate stability. When goods markets are integrated as well, exchange-rate stability becomes attractive relative to monetary independence. Preference convergence translated into further integration primarily through intergovernmentalist bargaining. Macroeconomic transmission: open economy macroeconomics produce economic and political pressures for policy change abroad, and they are critical to understanding the politics of macroeconomic conflict and policy adjustment.