The aim of this course is to provide students with the capacity to decipher the macroeconomic functioning of the world economy, giving them the instruments to build up a critical idea about the mechanisms of international markets and the ability of economic policy in regulating them. At the end of the course students will be able to analyse real world macroeconomic issues and recent economic policy issues through the theoretical models developed to analyze the economic forces in the short run and the long run. In dealing with real-world problems, students are encouraged to explore the potential and limitations of macroeconomic theory.

The course presents the economic models and techniques used in modern macroeconomic theory as tools to understand the behaviour of several aggregates (e.g. aggregate output, unemployment, inflation, interest rates, exchange rates) and evaluate alternative economic policies (monetary and fiscal policy used by governments to fight inflation and unemployment and to promote growth in the economy). Firstly, the course will cover the major macroeconomic markets. Financial and goods markets will be analyzed through the IS-LM model in a closed and then in an open economy. We will then investigate the labour market, in order to construct the AS-AD model. After that, we will study the exchange rate regimes; the macroeconomic policy issues, in particular in the Euro zone;  moreover we will have a focus on the pathologies of the economic system, such as the crisis of 2007-2010.

- Understand how basic models of the economy summarize and explain the interactions between the main macroeconomic variables 

- Learn to read data of current economic performances 

- Understand what causes economic activity to fluctuate over the years

- Develop specific skills in interpreting the role of different authorities in trying to stabilize the economy and to achieve specific economic and political goals

- Understand the connections between the domestic economy and the rest of the world

- Review the different positions of several schools of thought  – e.g. Keynesian economics vs classical economics – and how they can be synthesized

Assessment Guidelines for assigning main letter grades: A, B, C,D, and F.

A:  Work of this quality directly addresses the question or problem raised and provides a coherent argument displaying an extensiveknowledge of relevant information or content. This type of work demonstrates the ability to critically evaluate concepts and theory and has an element of novelty and originality. There is clear evidence of a significant amount of reading beyond that required for the course.

B:  This is highly competent level of performance and directly addresses the question or problem raised.

There is a demonstration of some ability to critically evaluatetheory and concepts and relate them to practice. Discussions reflect the student’s own arguments and are not simply a repetition of standard lecture andreference material. The work does not suffer from any major errors or omissions and provides evidence of reading beyond the required assignments.

C:  This is an acceptable level of performance and provides answers that are clear but limited, reflecting the information offered in the lectures and reference readings.

D:  This level of performances demonstrates that the student lacks a coherent grasp of the material.

Important information is omitted and irrelevant points included.In effect, the student has barely done enough to persuade the instructor that s/he should not fail.

F: This work fails to show any knowledge or understanding of the issues raised in the question. Most of the material in the answer is irrelevant.

Students are expected to have read before class and participate in the lectures.

SCHEDULE 

OUTLINE 

Week 1

- What is Macro and What Must Macro Explain?

   Some Macro Facts

   Ideological Controversy in Macro

- The short period 

  The goods market and IS curve

Week 2
- The money market and LM Curve

- The IS-LM model

- Week 3

- The IS-LM model (cont.)

- Fiscal and Monetary Policy

Week 4

- Exam 1

- The IS-LM model in an Open Economy 

Week 5

- The IS-LM model in an Open Economy (cont.)

- Economic Policies in an Open Economy

   Exchange rate regimes

Week 6

- Aggregate Demand

- The medium term 

   Labour Market 

Week 7

- Aggregate Supply

- The AS-AD model

Week 8

- Unemployment 

- Inflation 

Week 9

- Phillips curve

- The long period

Week 10

- Exam 2

- Pathologies: 2007-2010 Crisis

Week 11

- 2007-2010 Crisis (cont.)

- Hyperinflation

Week 12

- Public Debt

- Role of economic policy

Week 13

- Role of economic policy (cont.)

- Constraints to monetary and fiscal policy

Week 14

- European economic and monetary union

- The euro

Week 15

- Review of course

Final exam: Comprehensive. See the University schedule for date and time.