MACROECONOMICS
Instructional goals
This course aims to equip students with the analytical tools and foundational knowledge needed to understand and interpret key macroeconomic phenomena. The focus is on examining the workings of capitalist systems, including their cyclical fluctuations and long-term trends. The course also seeks to provide a structured, critical perspective on macroeconomics, encouraging students to reflect on current issues, ongoing debates, and economic policy decisions. Case studies (particularly those focused on the Italian economy), empirical tests of theories, and the analysis of official documents will serve as important tools for fostering this critical thinking.
Intended learning outcomes
Knowledge and Understanding: understanding i) the causal links between the primary macroeconomic variables (e.g., inflation, unemployment, economic growth), ii) the factors that drive cyclical fluctuations (short-term ups and downs) and long-term economic growth trends, iii) the role of insurance. Applying knowledge and understanding: By the end of the course, students will be able to apply foundational macroeconomic theories to formulate well-reasoned arguments in response to questions related to the discipline. Making judgements: Students will be able to critically analyze the effects of different macroeconomic shocks and assess the potential trade-offs in terms of government intervention efficiency. Communications Skills: Students will be able to articulate their reasoning on course topics in a clear, concise, and logically structured manner. Lerning Skills: The course materials will equip students with the knowledge and skills to succeed in more advanced economics courses and to plan, execute, and present an independent research project on macroeconomic topics.
Course Contents
The course covers the topics of income and national accounting, unemployment, money and inflation, debt, the economic cycle, capital accumulation and growth, and insurance.
Reference Books
Main textbook: Blanchard, Amighini, Giavazzi, "Macroeconomia: Una prospettiva europea", il Mulino, 2024 Additional textbook: Amendola, Carbonari, Ferraris, “Macroeconomia. Il minimo teorico”, II edizione, Egea, 2024 Lecture notes
Teaching Methods
Conventional classes.
Assessment Method
Student assessment will be structured as follows: 1. In-progress assessment (individual) through regular online tests on the Learn platform and problem sets. 2. End-of-course assessment (individual) through a final written exam. The final exam consists of open-ended questions, multiple-choice questions, and exercises.
Thesis assignment criteria
The student's genuine interest in macroeconomics.
Week 1
Introduction to Macroeconomics: Keynesian economics and the Great Depression. The neoclassical synthesis and the critique of rational expectations. The evolution of macroeconomic thought up to the recent financial crisis. Current directions in macroeconomic research.
Week 2
Core Concepts: Aggregate output, unemployment, and inflation. The relationships between these indicators: Okun’s Law and the Phillips Curve. Analysis across the short, medium, and long run.
Week 3
Short-Run: Equilibrium Structure of output. Aggregate demand for goods. Determination of equilibrium output. Interactions between investment and saving. Demand for money and interest rate determination. The liquidity trap.
Week 4
The IS-LM Model: The IS curve and the goods market. The LM curve and financial markets. Short-run macroeconomic equilibrium. Economic policy tools. Nominal and real interest rates. Risk and risk premiums. The role of financial intermediaries.
Week 5
Review session.
Week 6
Saving, Capital Accumulation, and Output: Interactions between capital accumulation and production. Effects of different saving rates. Comparison between physical and human capital. The Cobb-Douglas production function and the steady state.
Week 7
Technological Progress and Growth: The relationship between technological progress and economic growth. Determinants of innovation and productivity. The role of institutions in technological advancement. Technology and its impact on employment.
Week 8
Financial Markets and Expectations: Valuation of financial assets using expected present value. Asset prices and the yield curve. Stock markets and price fluctuations. Risk, speculative bubbles, waves of irrational optimism, and asset price dynamics.
Week 9
Expectations, Consumption, and Investment: Determinants of consumption and investment. Volatility in consumption and investment behavior. Monetary policy, expectations, and output. Budget deficit reduction, expectations, and economic performance.
Week 10
Fiscal Policy: Government budget constraint: deficit, debt, spending, and tax revenue. Ricardian equivalence, cyclically adjusted deficits, and war financing. The risks of excessive public debt levels.
Week 11
Monetary Policy: The relationship between money supply and inflation. The optimal inflation rate. Unconventional monetary policy tools. Monetary policy and financial stability.
Week 12
Review session.