My work on European integration

There are two themes in my work on European integration. One concerns the ways in which the well-established theory of monetary union does not adequately capture the European situation. In some cases this is because of the specific arrangements for policymaking that have been devised. Some of my work on central bank independence has this characteristic because it concerns ways in which the independence of the ECB raises special issues in monetary policy. This is most particularly true of Forder (2005). Similarly, in Forder (1998a) and my half of Forder and Huhne (1999)/ (2001) I drew attention to two problems arising from the design of the fiscal rules. They seem to be very much at the root of the difficulties that have in fact been encountered in attempts to adhere to the Growth and Stability Pact (or any later invention with any close resemblance to it). I cannot claim to have anticipated the magnitude of the crisis, but I did think fiscal, rather than monetary policy was where the biggest problems might arise. Other special features of the specifically European monetary union arise from the historical development of the Union. Forder and Menon (1998) sought to discover what impact the EU had had on macroeconomic policy up to that point, and that really amounted to a consideration of the effect of monetary integration; and in Forder (2001a) I suggested that an application of the (political science) theory of European integration raised the possibility that the difficulties of monetary union might lead to a compromise of the EU’s external trade policy.

The second strand concerns the history of intellectual responses to the economic issues around monetary union. Again, some of the central banking papers have this aspect – particularly Forder (1998b) and Forder (2001b). In Forder and Oppenheimer (1996) we noted that very different theoretical stories had been told about macroeconomics even between the internal market and monetary union proposals – the early one being markedly ‘Keynesian’, the latter, clearly anti-Keynesian. In Forder and Hurn (2003) we considered the explanation of a certain aspect of the behaviour of the currency markets. It had been suggested previously that the pound had become in a certain sense, much less linked to the dollar, and more to the deutschmark than it had been, and this had been explained by natural developments in the course of integration. We found that after the late 1980s the effect was reversed, but the same effect in relation to the connection between the franc and the deutschmark became more and more pronounced. This we attributed, not to nature, but to policymaker preferences shaping the relevant aspects of market behaviour. And in Forder (2007) I noted the disappearance from discussion of a certain conception of international policy co-ordination. It featured very prominently in early accounts of the benefits of the European Monetary System but was almost never mentioned later. This, like the Forder and Oppenheimer piece points to the operation of very different theoretical understandings at different times.

Forder, J. (1998a) ‘National autonomy’, in The European Union and national macroeconomic policy eds. J. Forder and A. Menon. London: Routledge pp. 28-44.

Forder, J. (1998b) ‘The case for an independent European central bank: A reassessment of evidence and sources’. European Journal of Political Economy 14 pp. 53-71.

Forder, J. (2001a) ‘The European Union and the growing danger of European protectionism’, in Asia-Europe on the eve of the 21st century eds. S. Chirathivat, F. Knipping, P. H. Lassen, and C. S. Yue. Singapore: Institute of Southeast Asian Studies pp.

Forder, J. (2001b) ‘Image and Illusion in the Design of EMU’, in From Nation State to Europe: Essays in Honour of Jack Hayward eds. A. Menon and V. Wright. Oxford: OUP pp. 158-174.

Forder, J. (2005) ‘The limits of ‘independence’ and the policy of the ECB’. Public Choice 125 pp. 431-444.

Forder, J. (2007) ‘Whatever happened to ‘policy co-ordination’?’, in Euroland and the world economy eds. A. Terzi and J. Bibow. Basingstoke: Palgrave pp. forthcoming.

Forder, J. and C. Huhne (1999) Both Sides of the Coin – A debate on the Euro. London: Profile.

Forder, J. and C. Huhne (2001) Both Sides of the Coin – A debate on the Euro, 2nd edition. (2nd edn) London: Profile Books.

Forder, J. and S. Hurn (2003) ‘Dollar-Deutschemark Polarity: Comparing the Pound and Franc’. Scottish Journal of Political Economy 50(3) pp. 217-231.

Forder, J. and A. Menon (ed.) (1998) The European Union and National Macroeconomic Policy, London: Routledge.

Forder, J. and P. M. Oppenheimer (1996) ‘The Fluctuating Rationale of Monetary Union’, in Elitism, Populism, and European Politics ed., J. E. S. Hayward. Oxford: OUP pp. 220-238.