1014516 - MACROECONOMIC POLICY

1.   Knowledge and understanding: The course aims to analyze the objectives of macroeconomic policy (i.e., allocative efficiency, income distribution, and macroeconomic stabilization) within both national and international contexts, with a specific emphasis on the European perspective. The analysis distinguishes between a positive and a normative approach, and it explores the roles of policymakers based on various ideologies. Students are expected to be familiar with the topics covered in the course and to develop their own comprehension skills, including through deductive reasoning that enables them to apply the theoretical frameworks presented in the course to interpret contemporary economic policy issues. In terms of instructional methods, the course content is primarily delivered through traditional lectures supported by slides and official economic policy documents designed to encourage active student participation during classes.
2.  Applying knowledge and understanding: The student should be capable of applying the acquired knowledge to comprehend the criteria used, if necessary, to prioritize among various macroeconomic policy objectives and to compare and assess the instruments based on their underlying ideologies and effectiveness. From a teaching perspective, incorporating prominent current case studies at both the national and international levels during classes offers a valuable opportunity to assess diverse economic policy approaches. It helps students understand that, depending on the unique economic context, the prioritization of objectives and the choice of economic instruments may vary. The analysis of these case studies involves the use of relevant quantitative data and statistics sourced from official documents. This approach serves to assess the student's proficiency in interpreting quantitative data to comprehend economic phenomena, thereby evaluating their capacity for practical application. 
3.  Making judgments: Macroeconomic policy is a social science, and as such, the priorities of its objectives, the choices made, and its very role can vary depending on the theoretical approach adopted. Students must recognize that different economic policy approaches, at times rooted in distinct ideologies, give rise to different policy measures. They should cultivate a critical perspective and independent judgment when tackling case studies related to fiscal, monetary, and welfare policies presented during lectures. Enhancing these skills can be achieved by fostering discussions and active student participation in class, including through participation in intermediate and final written essays and oral discussions, all of which will be considered in the final examination. 
4.  Communication skills: The course is conducted in English, and as a result, students must enhance and develop their proficiency in technical and economic English language usage. This is a valuable skill that serves as a practical tool for effective communication, especially when entering the job market. Students should be able to differentiate between the determinants of key economic phenomena that underpin the economic policy discourse, including inflation, unemployment, public and external debt, and inequalities. They should also be capable of employing technical and economic language both in written and oral forms. Seminars provide an excellent opportunity for students to engage with academic and institutional experts and delve deeper into specific topics covered in the course. These seminars contribute to strengthening their interpersonal skills and fostering a critical approach to fundamental macroeconomic policy issues.
5.  Learning skills: The student’s learning skills should be assessed not only at the conclusion of the course but also throughout the classes with a focus on encouraging active participation and teaching effective methods for studying macroeconomic policy. Studying macroeconomic policy in English, in comparison to other economic disciplines, necessitates blending the exploration of theoretical models with an examination of various historical and institutional contexts.The primary teaching methods employed include lectures with teaching materials primarily accessible through the online platform, “Studium”. Additionally, seminars and exercises are used to support learning. Learning skills are evaluated concerning both theoretical and applied aspects, including the ability to apply knowledge (i.e. “to know how to do”). Intermediate assessments are administered to gauge the average level of comprehension within the class.
   The examination process comprises a written test and an oral discussion.     

The teaching methodology primarily relies on formal lectures, supplemented by slides and official documents from prominent national and international institutional organizations. These materials serve the dual purpose of enhancing theoretical understanding and stimulating active participation among students in discussions and debates.

In addition to lectures and materials, tutorials are provided to assist students in tackling economic policy questions similar to those that may appear on the exam. These tutorials are conducted by the teacher in the classroom and are designed to help students effectively address and navigate complex economic policy issues, ensuring their readiness for the examination.   

While no official prerequisite are required, a basic understanding of economics (micro and macroeconomics) is essential for successful participation in the course. 

Attendance at lectures is typically compulsory.

Attending lectures offers students the opportunity to gain a comprehensive understanding of the course topics by directly engaging with the main arguments presented. Active participation in classroom discussions not only enhances students’ awareness of the knowledge they acquire but also provides the teacher with insights into the students’ progress. It allows the teacher to make timely adjustments to the program, if necessary, and to provide additional support to students as needed. 

A Primer on Economic Policy. The Whys and Hows of Public Intervention. Economic Policy Evaluation. Main issues in policy decision-making: The limits of knowledge, of representation, of confidence, of information, of benevolence and policy responses. Interdependence, spillovers, and coordination.

Macroeconomic equilibrium in the short run. Money and interest rates. Monetary policy, banks, and financial stability. The monetary policy in the Eurozone.

International capital flows and macroeconomic equilibrium. The exchange rate. The international monetary system.

Output, employment and inflation. Aggregate demand and aggregate supply. Demand management policies.

Fiscal policy, debt, and seigniorage.

Policies for the long run: supply side, inequality, and climate change. 

1. Burda M. and C. Wyplosz, 2022, Macroeconomics - A European Text. Oxford University Press, Oxford, UK, VIII edition (chapters 5-6- 9-10-11-12-13-14-15-16-17-18-19).

2. Bénassy-Quéré A, B. Cceuré, P. Jacquet and J. Pisani-Ferry, 2019, Economic Policy - Theory & Practice, Oxford University Press, Oxford, UK, II edition (chapters 1-2-3).

During each session, the examination consists of both a written and an oral component. The oral discussion is centered around the topics covered in the written exam and closely related subjects. The written exam has a duration of 1 hour and 30 minutes.

To be eligible for the oral exam, students must register on the Smart_edu platform no later than five (5) days before the official examination date.

The written exam includes a combination of open-ended questions and exercises that require algebraic and diagrammatic solutions with accompanying explanations. It is designed to assess:

-          - Knowledge of the topics outlined in the syllabus;

-          - Ability to use technical language and comprehend technical and economic terminology, especially in English;

-          - Capacity for critical analysis of the subjects studied;

-          - Ability to establish connections among different topics in the syllabus to form a comprehensive understanding of the course.

The oral exam’s purpose is to evaluate the students’ understanding of the topics covered in the written exam, their ability to orally present subjects from the syllabus, and their capacity to draw connections between the questions in the written exam and other subjects addressed during the course.

Students who attend lectures may have access to additional intermediate and final written and oral tests, which will be taken in account when determining their final score.   

The assessment criteria for both the written and oral exams are as follows: the student should demonstrate a fundamental grasp of the course program’s key concepts and topics; this includes the ability to comprehend and apply this knowledge to articulate economic policy issues clearly, using appropriate technical language in English. The student should be able to apply basic analytical tools to solve the written exam questions; this involves using simple analytical methods to address economic problems effectively. The student is expected to exhibit critical thinking skills by evaluating economic policy issues from various angles and perspectives. During the oral exam, the student must communicate her/his understanding of economic policy topics effectively, using appropriate technical English language. The student should be able to establish connections among different subjects covered in the syllabus to create a comprehensive framework of understanding.

The final score in the exam will be higher when the student excels in these criteria. The maximum score is awarded when all of the above criteria are met.

Self-assessment questions are available at the end of each chapter in the textbook, and additional exercises can be found on the website www.oup.com/he/burda8e/. These resources can aid students in evaluating their comprehension and practicing the application of analytical tools. 

As an example, some oral questions that do not correspond to the minimum knowledge to pass the exam are reported:

1.       The three functions of economic policy

2.       The Lucas critique

3.       Crowding out and crowding in

4.       The liquidity trap and the effectiveness of the monetary policy

5.        The channels of monetary policy

6.       Supply-side and demand-side policies

7.       The uncovered interest rate parity

8.       The costs of inflation

9.       The effect of a tax cut under both a fixed and a floating exchange rate

10.    The effect of a monetary policy expansion under both a fixed and a floating exchange rate