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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.


Recent Selected Publications

Nicholas Barr (2014)
'Income Contingent Loans and Higher Education Financing: Theory and Practice', in: Chapman, Bruce, Stiglitz, Joseph E, and Higgins, Timothy (eds) Income Contingent Loans: Theory, Practice and Prospects, Palgrave Macmillan

Nicholas Barr and Alison Johnston (2013)
‘Student loan reform, interest subsidies and costly technicalities: lessons from the UK experience’
Journal of Higher Education Policy and Management, 35(2): 166-177

Nicholas Barr (2012)
The Economics of the Welfare State
5th edition, Oxford University Press and Stanford University Press

Iain Begg (2011)
'Prevent or Cure? Dilemmas Facing Economic Governance'

Iain Begg et al (eds) European Economic Governance, Europe in Dialogue 2001/02, Gütersloh: Bertelsmann Foundation

Joan Costa-i-Font and Frank Cowell (2014)
Social Identity and Redistributive Preferences: a survey
Journal of Economic Surveys

Joan Costa-i-Font, Jofre-Bonet, Mireia and Yen, Steven T. (2013)
Not all incentives wash out the warm glow: the case of blood donation revisited, Kyklos, 66(4): 521-543.

Joan Costa-i-Font (2010)
'Family Ties and the Crowding Out of Long Term Care Insurance'
Oxford Review of Economic Policy, 26(4): 691-712

Paul De Grauwe (2013)
The political economy of the Euro.
Annual review of political science, 16(1): 153-170

Paul De Grauwe (2012)
Lectures in Behavioural Macroeconomics, Princeton University Press

Claire Gordon [with Will Bartlett and Roberta Benini] (2011)
Measures to Promote the Situation of Roma EU Citizens in the European Union
Study No. PE 432.747, requested by the European Parliament's Committee on Civil Liberty, Justice and Home Affairs, Brussels

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

Bob Hancké (2011)
'Varieties of European Capitalism and their Transformation', in: Paul Heywood, Erik Jones, Martin Rhodes and Ulrich Sedelmeier (eds.), Developments in European Politics 2, Palgrave MacMillan

Corrado Macchiarelli (2013)
'On the Joint Test of the Uncovered Interest Parity and the Ex-ante Purchasing Power Parity'
Review of International Economics, 21(3): 519-535

Christopoulou R. and Monastiriotis V. (2013)
'The Greek public sector wage premium before the crisis: size, selection and relative valuation of characteristics'
British Journal of Industrial Relations

Vassilis Monastiriotis [with R.Alegria] (2011)
'Origin of FDI and domestic spillovers: the case of Greek and European FDI in Bulgaria'
Review of Development Economics, vol.15 (2), pp.150-166

Waltraud Schelkle and Deborah Mabbett (2014)
'What Difference Does Euro Membership Make to Stabilization? The Political Economy of International Monetary Systems Revisited'
Review of International Political Economy

Waltraud Schelkle (2013)
‘Monetary integration in crisis: how well do existing theories explain the predicament of EMU?’
Transfer: European review of labour and research, 19(1): 37-48.

Waltraud Schelkle (2012)
'A crisis of what? Mortgage credit markets and the social policy of promoting homeownership in the United States and in Europe'
Politics and Society 40(1): 59-80

Marco Simoni (2013)
'The Left and Organized Labor in Low-Inflation Times'
World Politics 65(2)

Marco Simoni [with Lucio Baccaro] (2010) 'Organizational Determinants of Wage Moderation'
World Politics 62(4)



Quick Links

Staff in the European Institute working in this area include:

Doctoral Students

  • Sonja Avlijas
  • Mireia Borrell-Porta
  • Sarah Ciaglia
  • Marina Cino-Pagliarello
  • Michael Hume
  • Angelo Martelli
  • 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