Course 2019-2020 a.y.


Department of Economics

Course taught in English
Go to class group/s: 31
CLMG (6 credits - II sem. - OP  |  SECS-P/01) - M (6 credits - II sem. - OP  |  SECS-P/01) - IM (6 credits - II sem. - OP  |  SECS-P/01) - MM (6 credits - II sem. - OP  |  SECS-P/01) - AFC (6 credits - II sem. - OP  |  SECS-P/01) - CLELI (6 credits - II sem. - OP  |  SECS-P/01) - ACME (6 credits - II sem. - OP  |  SECS-P/01) - DES-ESS (6 credits - II sem. - OP  |  SECS-P/01) - EMIT (6 credits - II sem. - OP  |  SECS-P/01) - GIO (6 credits - II sem. - OP  |  SECS-P/01) - DSBA (6 credits - II sem. - OP  |  SECS-P/01) - PPA (6 credits - II sem. - OP  |  SECS-P/01) - FIN (6 credits - II sem. - OP  |  SECS-P/01)
Course Director:

Classes: 31 (II sem.)

Class-group lessons delivered  on campus

Mission & Content Summary


By the early 2000s an increasing numbers of countries had adopted a well defined central bank framework, which is characterized by two intertwined features: the authority becomes specialized in achieving the monetary policy goals, and consequently its traditional responsibilities in pursuing the financial stability are less important in its institutional perimeter. But then, after the Great Crisis erupted in 2008, reforms are undertaken and projects are under discussion in order to reconsider the central bank role. The depth and breadth of the crisis motivate an overall reconsideration of the relationships between monetary policy on the one hand and prudential regulation and supervision on the other, with specific attention to Europe and US. The course is devoted to a better understanding of the drivers of the policy choices, mixing traditional economics, new political economy and history.


  • Monetary  and Financial Policies: Economics, Politics and History.
  • Introduction: Monetary Policy, Exchange Rates, Financial Regulation and Supervision: Past, Present and Future.
  • The Global Financial Crisis: Discovering its Drivers.
  • The Great Moderation: Efficient Markets, National Policies and International Harmonization.
  • The Great Deviation: Monetary Policy, Financial Deregulation and External Unbalances.
  • The Great Recession and Beyond: Liquidity Trap, Unconventional Monetary Policies and Financial Reforms.

Intended Learning Outcomes (ILO)


At the end of the course student will be able to...
  • Explain  the evolution of both monetary and financial policies before, during and after the Great Crisis, with specific attention to the US and Europe.
  • Discuss  which are the present macroeconomic problems that have to be addressed and fixed in designing and implementing the monetary policy action on the one side and the regulatory and supervisory choices on the other side. 
  • Identify  the drivers of the policy choices, mixing traditional economics, new political economy and history.


At the end of the course student will be able to...
  • Choose and apply the appropriate framework to assess time to time and country by country the effect of various  forms of  monetary and financial policies.
  • Interpret the empirical evidence on the effects of changes in the design and implementation of different economic policy strategies.
  • Interact in a constructive way and think critically, using logic and rigor as essential professional skills.

Teaching methods

  • Face-to-face lectures


Just face to face lectures.

Assessment methods

  Continuous assessment Partial exams General exam
  • Written individual exam (traditional/online)


Attending students:

  • With the purpose of measuring the acquisition of the above-mentioned learning outcomes, the students’ assessment is based on a written exam (100% of the final grade).
  • Exams are in written form. The questions of the exam are four and compulsory (time= 60 minutes). The grade of each question is 7.5/30; to pass the exam the overall grade has to be at least 18/30. Mock exam questions are discussed during the course.
  • Students cannot ask proctors any question on the exam contents, and, however, any proctor answer on the exam questions is irrelevant. You must always motivate your answers. Answers without explanation are not evaluated. Any kind of mistake and/or omission and/or ambiguity is an error, that is worth at least 1 point. You must fill in the box on the top left corner with your personal details and you must sign for acceptance the Rules of the Honor Code. Exams without personal details and signature are not graded.
  • In order to withdraw from the exam, students must sign in the box on the top right corner. Students who do not sign in the appropriate space have their grade registered. Students can decide to withdraw by 15 minutes before the end of the exam. Only students who intend to hand in the exam or withdraw may leave the room, but no student is allowed to leave in the last 15 minutes before the end of the exam. To answer, you must use only the sheets enclosed with the exam, by writing in the proper spaces with a blue or black ink pen (not red) and your handwriting must be readable. In the last sheet, you find a space useful to complete your answers. As rough copy – and not for answering – you can use the back front of the sheets.
  • The solutions are posted in the Course Bboard. The paper show rules – including the date - is communicated with the grades; students cannot call for postponing/anticipating the paper show and cannot delegate it; no exceptions to the rules.

Non attending students:

  • Students’ assessment is based on the written exam (see the above mentioned rules that are applied to attending students).

Teaching materials


Compulsory references: slides and readings represent the teaching material. The class slides are posted week by week on the website of the course. The readings – which can be downloaded - are the following:

  • D. MASCIANDARO, Central Banking and  Macroeconomic Ideas: Economics, Politics and History, Baffi Carefin, Centre Working Paper Series, 2018, n. 2018-58, downloaded for free  from
  • T. PERSSON, G. TABELLINI,P (2000), chapter 15 (sections 15.1-15.3) and chapter 17.
  • P. KRUGMAN,  Inflation targets reconsidered, in ECB Forum, Conference proceedings, 2014.
  • G. TABELLINI, Inflation Targets Reconsidered, Comments on Krugman, in ECB Forum, Conference proceedings, 2014.
  • EGGERTSON, GIANNONI, The inflation-Output Trade-off Revisited, mimeo, 2013. 
  • F. CAPIE, G.E. WOOD, Central Banks and Inflation: an Historical Perspective – Part One, 2(2), 27-46., 1991. 
  • F. CAPIE, G.E. WOOD, The Development of Bank of England Objectives: Evolution, Instructions, or Reactions?, mimeo, 2005. 
  • G.E. WOOD, The Lender of Last Resort Reconsidered, Journal of Financial Service Research, 18(2/3), 203-227, 2000. 
  • All the class  slides and the compulsory readings are compulsory exam material and have to be carefully prepared for the exam independently from the time allocated to them in class. Regular attendance and active participation are crucial for not falling behind. If you miss the class, it is your responsibility to make up for the lecture notes and announcements made in class.

Other (non compulsory) readings: 

  • A. ALESINA, A. STELLA, The Politics of Monetary Policy, Harvard Institute of Economic Research Discussion Paper n. 218, 2010. 
  • B. BERNANKE, The Great Moderation, Remarks at the Meetings of the Eastern Economic Association, Washington DC, 2004. 
  • M.D. BORDO, The Lender of Last Resort: Alternative Views and Historical Experience, FRB Richmond Economic Review, vol.76,  n.1., 2012.
  • C. BORIO, Monetary Policy and Financial Stability: What Role in Prevention and Recovery?, BIS Papers, n.440., 2014. 
  • B. EICHENGREEN, K.J. MITCHENER, The Great Depression as a Credit Boom Gone Wrong, BIS Working Papers, Bank for International Settlement, n.137., 2007.
  • S. EIJFFINGER, D. MASCIANDARO (eds), Hawks and Doves: Deeds and Words: Economics and Politics of Monetary Policymaking, CEPR, London, 2018. 
  • C.A.E. GOODHART,  The Changing Role of Central Banks, BIS Working Papers, Bank for International Settlement, n.326., 2010. 
  • V. FRILLI, D. MASCIANDARO, G. TABELLINI, Political and Monetary Institutions and Public Financial Policies in the Industrial Countries, Economic Policy, n. 13, 341-376, October, London. (A), 1991. 
  • D. MASCIANDARO, M. QUINTYN, The Governance of Financial Supervision: Recent Developments, Journal of Economic Surveys, Vol.29 , 1-25., 2015.
  • D. MASCIANDARO, D. ROMELLI, Ups and Downs. Central Bank Independence from the Great Inflation to the Great Recession, Financial History Review, December, 1-31., 2015.
  • A. ORPHANIDES, Is Monetary Policy Overburdened? BIS Papers, n.435., 2013.
  • J.B. TAYLOR, The Financial Crisis and the Policy Responses: An Empirical Analysis of What Went Wrong, Rock Center for Corporate Governance, Working Paper n.30, 2009. 
  • L-H- WHITE, Free Banking in History and Theory, George Mason University, Department of Economics, 2014.
Last change 16/06/2019 19:54