MACROECONOMIC POLICY

1.Knowledge and understanding

The course aims to provide conceptual tools for the macroeocnomic analysis of the global economic environment. The role of economic policy, in the current context of financial globalization will be studied by devoting a particular attention to understand different theoretical approaches to policy making. Thus, the emphasis will be focused in describing, from a macroeconomic point of view, the interaction between the real and financial side of economies, by focusing on expectations, markets and the determination of the equilibrium level of income. A specific reference to Monetary Unions will be done.

2. Applying knowledge and understanding

Applying knowledge and understanding: Students are required to broaden both their culture and their terminology. They should develop proactive analysis capabilities, in order to use theoretical models and verify their applicability to real cases. The degree of their ability will be monitored during the course, also by interpreting relevant facts of the critical global macroeconomic environment which are the core center of the contemporary political debate.

3. Making judgments

It is particularly important that students develop their own critical skills and independent judgment capacity. Macroeconomic Policy is a matter of ideology, after all, and (therefore) an individual well- sounded personality should be used for the analysis of actual cases. These cultural advancements are required in order to develop the attitude to identify policy objectives, policy instruments and their applicability range, both within a domestic scenario and in a supra-national setting. The course aims to strengthen students' awareness, by providing them with few basilar elements of phylosophy, surrounding the different approaches, in order to stimulate the ability in understanding the complex nature of macroeconomic policy decisions.

4. Communication skills

During the course, the student will have the opportunity to improve and refine the technical language and to broaden their capability to express themselves in English. Communicative skills in the foreign language will not be tested, but it is obvious that the ability to reply to questions and discuss issues is “reasonably” necessary. Moreover, an adequate knowledge of basics of Macroeconomics and of Mathematics for Economics is needed.

5. Learning skills

The learning ability of the student will be checked by the teacher during the course, by encouraging participation and providing guidance for the most correct learning process. In this discipline, more than in others, analytical theoretical models should be carefully understood before they can be profitably referred to specific historical and institutional contexts.

Mathematics, Microeconomics

Mandatory. Students are firmly suggested to attend lectures.

Introduction and National Accounting*; The Goods Market*; The Financial Market International Economic Policy: IS-LM-BP*; The Phillips Curve*, The Expectations Theories*; The Macroeconomic Equilibrium: AD-AS*; A Keynesian Mode*l; Again on the Macroeconomic Equilibrium*; Inflation and Sovereign Debt Dynamics*; Introduction to DSGE Models; Optimal Currency Areas*

A star, *, indicates the topics without which the exam cannot be passed

1. Blanchard O., Amighini A., Giavazzi F.- Macroeconomics, a European Perspective, Pearson 2013.

2. Handouts on Macroeconomic Policy.

Students may refer to the Studium page of the course for Handouts. Further communications will be provided during the course.

Regular exam consists of a preliminary written test followed, in case of success, by the oral test.

The course is divided in two Modules. At the end of the first one, regularly attending students can sit a written test on the corresponding portion of the program.

No further tests.

1. Describe new policy approaches to dampen financial fluctuations: can you report which advantages they have with respect to mainstream theories?

2. Was the Euro a good Macroeconomic decision? What could improve the economic condition of Currency Union Members?

3. How important is for a country the level and the distribution of the human capital in order to explain its growth potential? Why?