(BQ) Part 1 book "International economics" has contents: Trade in the global economy; trade and technology - the ricardian model; offshoring of goods and services; import tariffs and quotas under perfect competition; import tariffs and quotas under imperfect competition,.and other contents. | omy is kept as a stabilization tool. In a monetary union, where states have also relinquished monetary policy to the ECB, the pain of hard fiscal rules is likely to be intolerable. 2 Preface ■ Once countries joined the euro, the main “carrot” enticing them to follow the SGP’s budget rules (or to pretend to follow them) disappeared. Hence, surveillance, punishment, and commitment all quite predictably weakened once the euro was up and running. These failures of the SGP came to light only gradually, but by 2003 the pact was in ruins, once it became clear that France and (ironically) Germany would be in breach of the pact and that no serious action would be taken against them. As we see next, fiscal problems in the Eurozone have only gotten worse, although whether the principles of the SGP can, or should, be reinstated is the subject of ongoing disagreement. A MODERN BOOK FOR A MODERN AUDIENCE Feenstra and Taylor’s text incorporates fresh perspectives, current topics, and 4 The Eurozone in Crisis, 2008–2013 up-to-date empirical research. It expands For almost 10 years, Eurozone policy making focused on two main macroeconomicthe study of international economics to goals: the ECB’s monetary policy credibility and inflation target, seen as a broad success given low and stable inflation outcomes; and the Eurozone governments’encompass the latest theories and world fiscal responsibility, seen as a failure given the general disregard for the SGP . However, policy makers (like their counterparts all over the world) failed to spot key macroeconomic and financial developments that were to plunge the Eurozone into crisis in 2008 and beyond. Boom and Bust: Causes and Consequences of an Asymmetrical Crisis With a fanatical devotion to inflation targeting, the ECB (and its constituent central banks) paid insufficient attention to what was historically a primary responsibility of central banks, namely, financial stability. Within some parts of the Eurozone (as .
