MACROECONOMICS AND ECONOMIC POLICY

This course aims at providing the methodological and theoretical tools to understand how the economies work and to explain the past and current economic developments. We will focus on the stylized facts of business cycle fluctuations and economic growth, the determinants of unemployment and inflation. We also discuss whether and to what extent economic policy may improve macroeconomic performance.

Knowledge and understanding: Students can understand the causal links among the main macroeconomic variables, know why the business cycle occurs and know the determinants of the long run economic growth. Moreover, they understand the macroeconomic effects of both countercyclical and structural economic policy interventions. Applying knowledge and understanding: Students can (1) apply macro models to formulate rigorous reasoning on different macro issues, (2) understand the content of articles and documents related to macroeconomic issues. Making judgments: Students are able to critically analyze the effect of different shocks on both the domestic economy and the global economy. They are also able to evaluate the role of the key economic actors and the effects of policy actions in different economic scenarios. Communication Skills: Students are able to (1) process data, documents and opinions on the most important macroeconomic issues (2) clearly present to an audience of peers their reasoning on a given macroeconomic issue as well as state the theoretical motivations underlying their conclusions. Learning skills: Classes, lecture notes, and articles allow students to undertake with autonomy more advanced courses of economics and to plan and conduct independently a small research project (e.g. an undergraduate dissertation) on macroeconomics topics. Personal development skills: - Self-management - Problem solving - Application of numeracy skills

Principles of Economics

Introduction- Defining the macroeconomics variables. The Short Run, the Medium Run and the Long Run PART I -The Short Run: The goods market, the financial markets and the IS-LM model. Fiscal and monetary policies in the short run. The open economy: The interest rate parity. The Mundell-Fleming model. PART II – The Medium Run: The labour market and the natural rate of unemployment. The IS-LM-PC model. Fiscal and monetary policies in the medium run PART III – The Long Run: Saving, capital accumulation and growth. The role of technological progress.

All course materials are made available via Moodle, including notes to accompany the lectures, but this can be supplemented with additional background reading. The recommended text is: Macroeconomia. Una prospettiva europea. Blanchard, Amighini e Giavazzi, ed. 2020. Il Mulino. Esercizi di macroeconomia. Guida allo studio del testo di Olivier Blanchard di D. W. Findlay, ed. il Mulino (opzionale)

Teaching is based on lectures and practice session in which written exercises will be solved and discussed with the students. Problem sets are made available few days before the practice session with the TA. The solutions of the problem set will be discussed in class. Students should attempt the assigned problems before attending classes, as they will have to hand them in every week. Students are expected to make positive contributions to class discussions and during the lectures. Valuable contributions students will be positively assessed in the final evaluation.

The final grade of the student will be defined as follows: 1. On-going evaluation (up to 2 points to be added to the final grade). Through these activities, knowledge of the topics covered in class and comprehension skills and competencies will be assessed (only for students attending the classes and taking the exam in the May-June session) The delivery of at least 2/3 of the problem sets distributed during the semester is mandatory to obtain the 2 bonus points from the on-going valuation. 2. Final written exam (up to 30 points): The final exam is based on the topics covered during the lectures and classes, the chapters of the textbook and the supplementary readings assigned during the course Through this activity, knowledge and comprehension skills and competencies will be assessed The final exam will be composed of a mix of open questions, multiple choice questions and exercises, through which the student will demonstrate to know theoretical concepts and how to apply them to real world cases, thus proving that he/she has acquired a good study method, critical skills and the ability to learn, requested to continue autonomously the study of the subject matter. The number of questions within each typology will be decided by the instructor during the course and it will be communicated to students before the exam. The grade to pass the exam is 18/30 in the final written exam. The instructor has the authority to review the answers provided in the written exam with the student and, if necessary, to reconsider the grade.

Interview with the lecturer, interest in the subject