Transcript Exploring possibilities for Europe's future financial

Exploring possibilities for
Europe's future financial
architecture
Hardy Hanappi
Ad personam Jean Monnet Chair for Political Economy of European Integration
Economics, TU Vienna
[email protected]
Macroeconomic Finance Workshop 2012 in Genova

The major crossroads

Consequences of strategies

Cautious assessment of probabilities

Conclusions for European policy
Overview
Financial
Architecture
Institutional
Design
Political
Decisions
Federal
Europe
Tightly interwoven
central economic
policy
Continental
State
German
leadership
oriented
Central policy
competence in
Europe's North
Linked transaction
money and political
asset markets
Northern bank union
manages Southern
exchange rates
German Bundesbank
concentrates all
competences
European Union
Patronage
system
ECB for Transaction
Money
Political process for
investment
Commonwealth of
nation states
Neo-colonial
state system
Patrone's money
reigns via foreign
exchange markets
Northern monetary
authorities in the
South
Military
supported
system
Politically seperated,
military exploitation
system
The major crossroads
Two completely
seperated monetary
regimes
Theoretical underpinnings
Need for institutions
Global embedding
Welfare implications
ECB for Transaction
Money
Political process for
investment
E-Money Theory
Institution Design
Credit Theory
Many new institutions
serious changes in
existing institutions
Difficult
see papers
(Hanappi, 2012a, 2012b)
Linked transaction
money and political
asset markets
General monetary
equilibrium
theory
Some changes in
existing institutions
Easy
Northern bank union
manages Southern
exchange rates
Institutional Design
Exchange rate
theory
Few new institutions
few new regulatory
rules
German Bundesbank
concentrates all
competences
Regulatory policy
theory
equilibrium theory
Obsolete existing
institutions
few new regulatory rules
Easy
Moderate divergence between
North and South
Divergent distribution
Patrone's money
reigns via foreign
exchange markets
Monetary trade
theory
No new institutions
Few new regulatory
rules
Easy
Strong fall of welfare in the
South
Worsening distribution
Northern monetary
authorities in the
South
Traditional
monetary theory
Reforms in monetary
authorities in the South
Two completely
seperated monetary
regimes
Traditional
monetary theory
No need for changes
Somewhat difficult
new player in global
oligopoly
Some political resistance
from other global players
Easy
Stabilizing European welfare
improving distribution
Falling European welfare
worsening distribution
Moderate divergence between
North and South
Divergent distribution
Strong fall of welfare in the
South
Stagnation in the North
Welfare disaster in the South
Fall of welfare in the North
Extreme worsening of distribution
Consequences of strategies
Financial
Architecture
Institutional
Design
Political
Decisions
40
50
Federal
Europe
Tightly interwoven
central economic
policy
Continental
State
60
German
leadership
oriented
Central policy
competence in
Europe's North
European Union
30
50
Patronage
system
Commonwealth of
nation states
Neo-colonial
state system
70
ECB for Transaction
Money
Political process for
investment
Linked transaction
money and political
asset markets
80
Northern bank union
manages Southern
exchange rates
60
German Bundesbank
concentrates all
competences
40
Patrone's money
reigns via foreign
exchange markets
90
Northern monetary
authorities in the
South
Military
supported
system
Politically seperated,
military exploitation
system
20
Two completely
seperated monetary
regimes
Assessment of probabilities
10
Stabilizing European welfare
improving distribution
Falling European welfare
worsening distribution
Moderate divergence between
North and South
Divergent distribution
Moderate divergence between
North and South
Divergent distribution
Strong fall of welfare in the
South
Worsening distribution
Strong fall of welfare in the
South
Stagnation in the North
Welfare disaster in the South
Fall of welfare in the North
Extreme worsening of distribution
Welfare index
Expexted welfare
index
10
0,4
7
1,12
8
 Change probabilities !
1,44
5
0,6
3
0,41
2
0,1
1
0,35
•Theoretical work
•Education
•Political practice
Conclusions for European policy
Recent Papers:
Can Europe survive?
Shangri La Governance
Money, Credit, Capital and the State
Gramsci meets Veblen: On the search for a new revolutionary class
Download:
http://www.econ.tuwien.ac.at/hanappi/publications.html
Thank you for your attention