Question

Write a literature review about the following research question: In what ways did European countries benefit from the Economy and Monetary Integration? A literature review is an essay and should include a strong introduction, body paragraphs, and a conclusion. It should define important terms, get the historical overview, present some theories or personalities related to the topic, etc.

Answer 1

Literature Review:

The benefits of Economic and Monetary Integration

Introduction:
The economic and monetary integration often referred as EMU( Economic and Monetary Union) is basically European integration is a well defined process, which results in the creation of a single market through elimination of various types of economic and non economic barriers through the integration process.

The Integration process can be defined as the gradual elimination of economic barriers between the independent states, thetefore making all the economies of these states to function as one entity.

Body :

Paragraph1
The benefits of EMU are multidimensional in nature involving political, economical and cultural aspects. Such integration of economy and monetary policies has resulted in low inflation rates , low interest rates , stability in the monetary policy , stability in the foreign exchange rates in the European countries.
The integration is focused to support the sustainable economic progress and continuous growth along with creating employment opportunities in the European countries through the new union of economic and monetary policy.

Paragraph 2
The integration has resulted in many advantages that have outweighed the costs incurred in such integration. The main fundamental four aspects of advantages are being discussed below:

1) implementation of an efficienct and effective policies such as monrtary and fiscal with an objective of bringing stability in price .
2) Coordination and integration of economic and fiscal policies to align them in accordance with economic objectives in European countries
3) Making sure the resultant single market operates effectively to monitor , supervise and direct the European financial institutions.

Paragraph 3
How it works:
As the monetary policy tends to influence the exchange rates and interest rates to benefit the economy through controlling the supply of money from time to time whenever required , but if each country will have a separate monetary policy then the concept of single market cannot operate as separate monetary policy will create confusion , and the resulting benefits will be fewer and trade could be disrupted.
However under economic and monetary union , the monetary policy will be closely coordinated resulting in mutual benefits for each country.

Conclusion:
Thus the integration process has lead to major benefits as addressed above to the European countries .
Beginning with the elimination of barriers, reduction in the taxes , tariffs quotas etc

Moreover the economic integration, has eliminated the hurdles and interruptions that previously used to inhibit the regulations and restrictions on movement of factors of production such as labour, capital and technology , among its members are now eliminated.

Then the emergence of free trade areas and customs unions, where countries adopt common external trade policies and a single market to operate, the integration has proved as a benefit in each aspect to European countries

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