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Political Economy in Europe

Research in Political Economy in Europe concentrates on the interaction between political and economic processes in Europe. We study these interactions in different areas. In the monetary field there is the interaction between the sovereign debt crisis in the Eurozone, the political responses to the crisis and the institutional reforms that the evolving crisis have imposed on the Eurozone. We study how different social models affect the workings of capitalism and how the different varieties of capitalism in turn influence social models. Another area of research relates to the interaction between the labour market institutions and the economic governance of the EU and the Eurozone.

Research leadership in this area is boosted by the recent appointments of professors Tito Boeri, Peter Hall , and Dani Rodrik as LSE Centennial Professors. They have joined the large group of European Institute researchers that is focusing on key themes such as rethinking EMU and economic governance, the economic and social implications of the euro crisis in South East Europe, employment relations, and new sources of economic growth and welfare reform across Europe.

Examples of Key Research Themes:

  • Rethinking EMU and economic governance
  • European capitalism(s) and European social model(s)
  • Economic migration, labour markets and population dynamics
  • Welfare including pension reform
  • Fiscal austerity and new sources of economic growth
  • Employment relations, labour market performance and institutional reform
  • Regional policy, industrial structure and economic development
  • East-west international division of labour


Political Economy of Europe Highlights



Economics of Monetary Union, 10th Edition, Oxford University Press

The tenth edition of Economics of Monetary Union provides a concise analysis of the theories and policies relating to monetary union. Paul De Grauwe analyses both the costs and benefits associated with exiting the eurozone, as well as presenting a discussion of the banking union, the current issues surrounding the TARGET2 payment system, and the role of the European Central Bank.

In Part One, Paul De Grauwe examines the implications of adopting a common currency, assessing each country's benefit from being a member of the eurozone, while also questioning whether other parts of the world would gain from monetary unification. Part Two of the book looks at the problems of running a monetary union by analysing Europe's experience and the issues faced by the European Central Bank.

                                                               Goverance of EU book cover

Governance of the European Monetary Union

The crisis in the euro area is a defining moment in the history of European integration. It has revealed major flaws in the architecture of the European Union; it has challenged European institutions to shape an appropriate response; and it has tested the patience of a European public that is eager to see their economic prospects improve again. This volume brings together some of the world’s top economists and policymakers to explain how this crisis came about and what is to be done. The policy agenda these chapters establish is going to be difficult to implement, not least because of popular misunderstanding and political opposition. This book argues, that it is essential that European policymakers push forward this agenda or they run the risk of seeing Europe’s economies fall back into crisis. This book was previously published as a special issue of the Journal of European Integration.

Edited by Erik Jones and Francisco Torres.

Recent Selected Publications

Barr, Nicholas, ‘Income Contingent Loans and Higher Education Financing: Theory and Practice’, in Chapman, Bruce, Higgins, Timothy, and Stiglitz, Joseph E. (eds) (2014), Income Contingent Loans: Theory, Practice and Prospects, Basingtoke, Hants: Palgrave Macmillan, pp. 63-75.

Barr, Nicholas, ‘Financing Higher Education: Mobility, Quality, and Access’, in Gérard, Marcel and Uebelmesser, Silke (eds) (2014), The Mobility of Students and the Highly Skilled: Implications for Education Financing and Economic Policy, Cambridge, Mass.: MIT Press, pp. 189-227.

Begg, I. (2014) ‘Fiscal policy transparency’ in Forssbaeck, J. and Oxelheim, L. eds. The Oxford Handbook of Economic and Institutional Transparency,Oxford: OUP

Begg, I. (2015) ‘EU governance of sustainable development: social and environmental policies’ in Barbier, J.-C., Rogowski, R. and Colomb, F. eds. The Sustainability of the European Social Model: EU Governance, Social Protection and Employment Policies in Europe, Cheltenham: Edward Elgar

Begg, Iain., Bongardt, A., Kalypso, Nicolaidis and Torres, Francisco ( 2015) EMU and Sustainable Integration. Journal of European Integration, 37 (7). Pp. 803 – 816. 

Costa-i-Font, Joan and McGuire, Alistair and Varol, Nebibe (2014) Price regulation and relative delays in generic drug adoption Journal of Health Economics. ISSN 0167-6296

Costa-i-Font, Joan and Cowell, Frank (2014) Social identity and redistributive preferences: a survey Journal of Economic Surveys. ISSN 0950-0804

De Grauwe, Paul, and Ji, Yuemei, The fragility of two monetary regimes: The European Monetary System and the Eurozone, International Journal of Finance & Economics, Volume 20, Issue 1,  pages 1–15, January 2015

De Grauwe, Paul, and Macchiarelli, Corrado, 'Animal Spirits and Credit Cycles', Journal of Economic Dynamics and Control, 2015

Foresti P. and Napolitano O., (2014). 'Money Demand in the Eurozone: Do Monetary Aggregates Matter?' Engineering Economics, Vol. 25, No. 5.

Bob Hancké (2013) 
Unions, Central Banks and EMU: Labour market institutions and monetary integration in Europe. Oxford: Oxford University Press.

Jones, Erik and Torres, Francisco (2015) An ‘economics’ window on an interdisciplinary crisis. Journal of European Integration, 37 (7). pp. 713-722. ISSN 0703-6337

Jones, Erik and Torres, Francisco (2015) Using interdisciplinary analysis to shape a policy agenda. Journal of European Integration, 37 (7). pp. 875-880. ISSN 0703-6337

Christopoulou R. and Monastiriotis V. (2015), 'Public-private wage duality during the Greek crisis', Oxford Economic Papers [DOI: 10.1093/oep/gpv054]

Monastiriotis V. and Martelli A. (2014), 'Labour market informality and non-standard employment in Serbia during the global financial crisis', Südosteuropa, vol.62 (4), pp.421-439.

Mabbett, D. and W. Schelkle (2014) ‘What difference does Euro membership make to stabilization? The political economy of international monetary systems revisited’, published online in Review of International Political Economy (May).

Schelkle, Waltraud, and Barta, Zsofia (2015) At cross-purposes: commercial versus technocratic governance of sovereign debt in the EU Journal of European Integration. 1-20. ISSN 0703-6337



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         Staff in the European Institute
              working in this area include:

             Doctoral Students:

  • Sonja Avlijas

  • Mireia Borrell-Porta

  • Sarah Ciaglia

  • Marina Cino-Pagliarello

  • Sebastian Diessner

  • Michael Hume

  • Angelo Martelli

  • Fabian Mushovel

  • Chrysoula Papalexatou

  • Antonio Roldan-Mones

  • Pieter Tuytens

  • Shahin Vallee

             Recent Past Doctorates:

  • Zsofia Barta

  • Abel Bojar

  • Steve Coulter

  • Maximilian A. Freier

  • Angela Garcia Calvo

  • Francesco Grillo

  • Alison Johnson

  • Niclas Meyer

  • Costanza Rodriquez-D'acri

  • Sotirios Zartaloudis

  • Valentina Zigante