PRINCIPLES OF ECONOMICS
Instructional goals
The course aims at introducing the fundamentals of economic theory.
Intended learning outcomes
KNOWLEDGE AND UNDERSTANDING SKILLS
Students at the end of the Course will have proved their understanding of the main microeconomic and macroeconomic relations such as: utility and profit maximization, the process of GDP formation, the role of monetary and fiscal policy, the modus operandi of the European institutions and of the European Central Bank. The acquired information set is a fundamental support for the understanding and deepening of the studies of all higher-ranking economic and financial subjects.
APPLYING KNOWLEDGE
At the end of the Copurse, Students will be able to recognise the main interdependencies between real and monetary variables, both at the microeconomic level, as well as at the macroeconomic one.
ABILITY TO DRAW CONCLUSIONS
Students will be able to identify the most appropriate models, among those presented in the course, to describe microeconomic and macroeconomic phenomena in their relationship with the real world.
COMMUNICATION SKILLS
Students will be able to describe economic problems analytically, with the opportunity to refer to the scientific literature proposed in the course. Students will also be able to interact in operational contexts related to economic phenomena, being able to develop analyses through the identification of causality links and the most appropriate methodologies to interpret them.
ABILITY TO LEARN
At the end of the Course students will be acknowledged
of the theoretical references concerning the effects of fiscal and monetary policy. This will enable them to tackle studies in the economic and financial sectors at more advanced levels.
Course Contents
- Demand and supply
- Consumption theory
- Production
- Market theory
- Public intervention
- Labor market
- Growth and income distribution
- Inflation
- Unemployment
- Money and banking
Reference Books
N.G. Mankiw, Principles of Economics, 7th ed.,
Teaching Methods
- Class lectures
- Practical applications and exercises
Assessment Method
Written exam
Thesis assignment criteria
None
Week 1
INTRODUCTION TO ECONOMICS (ch. 1-3)
Introduction, info about grading and other suggestions.
Basic principles of Economics and the role of economists.
Market economy, demand and supply.
Week 2
MARKET DEMAND AND SUPPLY (ch. 4-5)
Market dynamics: demand, supply, market equilibrium.
Comparative statics.
Demand and supply elasticities.
Week 3
CONSUMPTION THEORY (ch. 21)
Rational choices and constrained optima. Utility functions and indifference curves. Optimal choices, internal solutions and corner solutions.
Price, income and substitution effects.
Week 4
PRODUCTION THEORY (ch. 13, 18)
Factors of production and production functions in the short/long run. Marginal returns.
Cost analysis.
Profit maximization.
Week 5
PERFECT COMPETITION (ch. 14)
Revenues and profit maximization under perfect competition.
The role of taxation.
Entry and exit dynamics.
Week 6
MARKET THEORY: MONOPOLY AND OLIGOPOLY (ch. 15)
Monopoly.
Natural monopolies and antitrust legislation.
Oligopoly and game theory.
Week 7
WELFARE (ch. 6-8)
Pareto efficiency.
Welfare theorems.
Market failures.
Week 8
NATIONAL ACCOUNTING: GDP (ch. 23)
Introduction to macroeconomics. Nominal and real GDP.
Inflation.
Consumption and investments.
Week 9
INFLATION AND THE COST OF LIVING (ch. 24)
Financial markets and institutions. Financial tools.
Interest rates and public debt.
Week 10
MONETARY ECONOMICS (ch. 30)
Definition and role of money.
Monetary institutions.
Central Banks and money supply.
Week 11
IS-LM MODEL (ch. 25)
IS and LM curves.
Macroeconomic equilibrium.
Fiscal and monetary policy.
Week 12
UNEMPLOYMENT (ch. 18, 28)
Labor demand and supply.
Phillips curve, natural rate of unemployment, short and long run unemployment.
The role of economic policies.