Financial Factors in the Economic and Monetary Union

Abstract

With this thesis a long-term desire has been fulfilled. Despite my deliberate choice to leave university and start working in the "real world" after I graduated, the idea to pursue a PhD always remained with me. I nevertheless shied away from openly starting such an ambitious grand project, and took a cautious approach instead. After a number of published and unpublished attempts over the years, the financial crisis and the sovereign debt crisis provided the inspiration for a clearly defined topic. Most economist will vividly remember this fascinating period, when conventional wisdoms were questioned and many new ideas took hold. In retrospect, writing a thesis certainly was not as difficult as I had feared, even though it took more time than I had hoped. Combining a thesis with daily policy work is a challenge, but doing this at DNB was a tremendous privilege. I took inspiration from the natural interaction between policy and research at DNB, and from the many colleagues that are familiar with and sympathetic to such a project. One particular example has been organizing a workshop on gross capital flows with Jolanda Peeters and Neeltje van Horen. The speech I wrote for that occasion contained several elements that form the heart of this thesis. I would also like to thank Job Swank, Paul Hilbers, Peter van Els, Christiaan Pattipeilohy and Saskia de Vries for their encouragement and for giving me time to-sometimes-prioritize research over policy. This thesis would not have been finished without the help of my supervisors, Jakob de Haan and Steven Brakman. Jakob's optimism and ability to have faith in people led to a natural assumption that I would manage and boosted my confidence. Steven has an eagle eye for texts and lines of reasoning that are not fully clear, which helped greatly to further improve my papers. I also want to express my gratitude to my co-authors. Leo de Haan and Jan Willem van den End for their work ethic and talent to channel ideas into a clear empirical strategy. Our cooperation made me realize that I was able to make valuable contributions to genuine research. Thanks also to Mariarosaria Comunale for her strong econometric skills and her continuous enthusiasm in tackling a topic that was quite unexplored and therefore not so clearly defined at the time. And finally Niels Gilbert for the countless fruitful discussions on EMU in our shared office, which have led to many policy notes, articles, papers and still unexplored ideas. Martin Admiraal and René Bierdrager provided excellent data assistance. Many thanks also go to the colleagues at the Raad van State (Council of State). Two secondments there helped me to look at EMU from other angles than just the economic one, and made me realize that the knowledge acquired with my academic work was also useful for policy advice to Dutch Parliament. In addition, I am grateful to the members of the assessment committee, Paul de Grauwe, Harry Garretsen and Kees Koedijk, for their willingness to read and comment on my manuscript. Finally, the contribution ...