Working Paper: We need more Europe in the Monetary Union. Which Europe? Hints from policy games.

Under the pressure of the 2008 crisis serious flaws have emerged in the design of the European Economic and Monetary Union (EMU) as a supranational architecture which aims at generating and distributing  collective benefits from integration among highly interdependent countries. If we agree that more Europe is needed, we shall urgently ask "Which Europe?". Economists Luciano Andreozzi and Roberto Tamborini from EconPol Europe network partner Università di Trento introduce here an interesting policy game setup of two interdependent countries where each sovereign government seeks to optimise its own welfare function reflecting social preferences over policy options and their outcomes. Read here why the strategy of further integration by an extended system of binding rules enforced by technocratic agencies may be unsuccessful and which consequences should be drawn.