MACROECONOMICS

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 will also discuss whether and to what extent economic policy may improve macroeconomic performance.

Microeconomic principles, basic algebra and arithmetic

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 are able to: (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

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. PART II – The Medium Run: The labor 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. Human capital and demographics. PART IV: The open economy: The interest rate parity. The Mundell-Fleming model.

All course materials are made available via Moodle, including notes to accompany the lectures. Additional background reading will also be provided. The recommended textbook is: Blanchard, O. Giavazzi F & Ameghini A., Macroeconomics: A European Perspective 4/E, Pearson, 2021

Teaching is based on lectures and practice sessions 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 to the problem set will be discussed in class. Students should try to solve the assigned problems before attending classes. Students are expected to make positive contributions to class discussions and during the lectures. Valuable contributions by students will be positively assessed in the final evaluation.

The student will be evaluated based on the individual scores achieved on a final written exam. The exam is based on the topics covered during the lectures and classes, the chapters of the textbook and, possibly, the supplementary readings assigned during the course. It will be composed of a mix of open-ended 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. The number of questions within each typology will be decided by the instructor during the course and will be communicated to students before the exam. In order to pass the exam, it is necessary that the student gets at least 18/30. The correct answer to all questions and the correct resolution of exercises lead to getting 30/30 with the possible awarding of cum laude. Only for students taking the exam in December (I appello): As an alternative to the entire final exam, the student can take a mid-term exam (approximately held during the 7th week of the course), whose weight on the final grade is 50%. For those who successfully pass the mid-term, the exam in December will be shorter and worth the residual 50% of the grade. The student always has the possibility of taking the entire exam at any appello.

Confidence with the use of mathematical language and data analysis, excellent performance at the final exam (top 3% of the class), interview with the lecturer to test the interest in the subject