ECONOMIC POLICY I

This course is among those characterizing the Bachelor’s Degree programme in Economics and Management. The aim of the course is to provide an overview of main macroeconomic issues and tools. The course analyses models explaining the determinants of equilibria in goods and financial markets in closed and open economy. A particular attention is devoted to the temporal evolution of the equilibrium, distinguishing between short and medium run dynamics. The models analysed in the course will help understanding the effect of economic policies, such as fiscal policy and monetary policy, on three main macroeconomic variables: aggregate output, unemployment rate and inflation rate.

1. Knowledge and understanding:
1.1. Understand the interconnections between goods and financial markets.
1.2. Understand the determinants of short and medium run equilibrium in goods and financial markets in closed and open economy.
1.3. Understand the effect of fiscal and monetary policies in the short and in the medium run


2. Ability to apply knowledge:
2.1. Identify effects of economic policies on goods and financial markets
2.2. Apply macroeconomic models to understand which economic policy tools may be used to achieve specific goals set by governments or central banks in terms of output, unemployment rate and inflation.
2.3. Evaluate the differential impact of alternative economic policy instruments on the equilibrium in good and financial market.

3. Making judgements:
3.1. Evaluate the condition of a particular macroeconomic system and formulate hypothesis on its future evolution, based on analytical models.
3.2. Based on the models studied in the course, evaluate the efficacy of alternative economic policies on various macroeconomic objectives in the short and medium run.
3.3. Understand the current economic debate and critically assess the empirical relevance of the models studied.

Compulsory Prerequisites: http://www.unive.it/pag/203/

Prerequisites: main learning outcomes of the Math course (first and second module) must be achieved (even if the exam has not been taken yet). In particular, students should be familiar with basic tools of analytic geometry and systems of equations.

The program for the course is as follows:

National accounts; price indexes and inflation rate
Goods market
Financial markets
IS-LM model
Extending the IS-LM model
Open economy and IS-LM model
Labour market
Phillips curve, natural rate of unemployment and inflation
From the short to the medium run: the IS-LM-PC model

O. Blanchard, A. Amighini e F. Giavazzi, Scoprire la macroeconomia 1. Quello che non si può non sapere, Il Mulino, Bologna, 2016
Additional material on specific topics will be made available on Moodle.

The exam is in written form and lasts 60 minutes. During the test, the use of books, notes, phones, or any other electronic devices is prohibited, except for a calculator. It is not possible to take the exam in oral form.

The exam covers topics selected from those discussed during the course. The exam is structured in two parts: the first consists of multiple-choice questions; the second includes at least one exercise similar to those covered in the practice sessions, incorporating both theoretical analysis and numerical calculations.

The instructor is responsible for ensuring that the rules of authenticity and originality of the exam papers are respected. Therefore, in cases where there is suspicion of irregularity, the exam may require further analysis, which may be conducted in a manner other than those described above.

written

The instructor is responsible for ensuring the authenticity and originality of all examinations and coursework. In cases of suspected academic misconduct, an additional on-site assessment may be required during the exams, which may differ from the standard format.

The exam consists of two parts: QUIZ and EXERCISE(S). The maximum score is 32 points, divided as follows: 20 points for the QUIZ and 12 points for the EXERCISE(S).

Part One – QUIZ
The quiz includes:

10 multiple-choice questions
only one correct answer
+2 points for each correct answer, −0.5 points for each incorrect answer

The maximum score for the first part is 20 points.
A minimum of 10 points in the quiz is required. Otherwise, the second part will not be graded.

Part Two – EXERCISE(S)
The second part consists of exercise(s) and/or open-ended question(s) of a theoretical-quantitative nature.
For grading purposes, the following are required:
i) a complete presentation of the procedure, and
ii) a discussion of the results.

The maximum score for this part is 12 points.

During the exam, any form of communication is prohibited.
The use of books, notes, mobile phones, laptops, or any other electronic device with Internet access is also forbidden.
Only the use of a non-programmable calculator is permitted.

The exam is written and lasts 60 minutes. During the test, the use of books, notes, phones, or any other electronic devices is prohibited, with the exception of a calculator. No oral examination option is available.

a) Teachers’ frontal lectures;
b) Tutorials

The exercises presented during the tutorials and the topics discussed in teachers’ notes are part of the exam’s program.

Additional exercises can be found in this book: D. W. Findlay, Esercizi di Macroeconomia. Guida allo studio del testo di O. Blanchard, A. Amighini, F. Giavazzi, Il Mulino, Bologna, 2017.

Sustainability

This subject deals with topics related to the macro-area "Poverty and inequalities" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development