30443 - INTERNATIONAL MACROECONOMICS
Course taught in English
Synchronous Blended: Lessons in synchronous mode in the classroom (for a maximum of one hour per credit in remote mode)
Knowledge of the concepts covered in introductory undergraduate macroeconomic and microeconomic courses is highly recommended. Suggested readings (non-compulsory) to review these concepts are: B.D. BERNHEIM, M.D. WHINSTON, Microeconomics, McGraw-Hill; O. BLANCHARD, Macroeconomics, Pearson.
The mission of this course is to develop tools and skills needed to understand and interpret the evolution of economies in an international environment. Recent shocks, from the Great Recession to the Sars-Cov2 pandemic, have shown the extent of interconnections among economies and have highlighted how taking a global perspective is of paramount importance for managers. The course is divided into two sections. Section 1 analyses current monetary and financial policies. It focuses on the relevant contemporary business cycle issues in order to enhance the macroeconomic knowledge of the students involved in managerial studies. Section 2 introduces students to the debate on economic globalization. The aim is to provide students with a better understanding of the causes and consequences of international trade and international production.
Section 1: Monetary and Financial Economics.
- Introduction: Macroeconomics for Business.
- Macroeconomics: General Principles and Multiple Equilibria.
- The Global Financial Crisis: Discovering its Drivers.
- The Great Moderation: Efficient Markets, Economic Policy Rules and Macroeconomic Stability.
- The Great Deviation: Lax Monetary Policy and Financial Deregulation.
- The Great Recession: Financial Bubbles and Economic Crises.
- The Great Liquidity Trap: Unconventional Monetary Policies and the Austerity Debate.
- Rethinking Macroeconomics: Evolution or Revolution?
- After Covid-19 pandemic: effects and perspectives
Section 2: International Trade.
- Introduction: Key concepts and facts.
- Why Do Countries Trade? The Ricardian Model: Labor Productivity and Comparative Advantage.
- Trade and Inequality: The Heckscher-Ohlin Model
- Trade and Growth: The “Standard Trade Model”
- Market Power and Imperfect Competition: Creative Destruction and Firm Selection.
- Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises
- Define the relevant contemporary business cycle issues
- Recognize and distinguish the main macroeconomic drivers
- Recognize the main causes and consequences of international trade
- Explain the impact of trade policies on welfare and income distribution
- Identify the costs and the advantages of international production
- Choose and apply the appropriate framework to assess business cycle episodes.
- Interpret the empirical evidence on the effects of economic policy measures.
- Interpret the current macroeconomic situation and define possible future paths
- Discuss the causes and consequences of international trade
- Analyze the impact of different trade policies on welfare and income distribution
- Assess the costs and the benefits of international production
- Critically analyze and discuss the impact of different economic policies
- Interact in a constructive way with peers to reach a common goal
- Address in a professional way the analysis of economic issues.
- Face-to-face lectures
- Group assignments
- Interactive class activities on campus/online (role playing, business game, simulation, online forum, instant polls)
The learning experience of this course includes, in addition to face-to-face lectures, Group Assignments and Class Discussions using an online discussion forum.
Group assignments allow students to apply the analytical tools illustrated during the course, develop teamwork skills and improve their capacity of writing formal reports.
Class discussions give students the opportunity of expressing ideas and interacting with peers, improving critical thinking skills and writing ability in a more informal context, applying the concepts introduced during lectures to real world situations.
Evaluation methods are the same for attending and non-attending students.
With the purpose of measuring the acquisition of the above-mentioned learning outcomes, students’ assessment is based on a written exam, a group assignment and class discussions.
- Written Exam (WE) – weight = 75%:
The written exam is aimed at verifying knowledge and understanding of the concepts introduced during the course. Moreover, the exam evaluates students’ ability of expressing in a clear and logic way the concepts learnt.
The (general) written exam is composed by 2 essay questions, one on Section 1: Monetary and Financial Economics and one on Section 2: International Trade. The time available to complete the exam is 70 minutes. The exam is open-book (electronic devices, beyond the one used to answer exam questions, are not allowed).
Essay questions may require to explain concepts, discuss statements, graphs, data or policy measures, derive analytical results, provide an opinion about economic issues using the tools developed during the course.
The written exam can be divided into 2 partial exams (35 minutes each): the midterm exam on Section 1, composed by 1 essay question, and a final exam on section 2, composed by 1 essay question. Only students passing the midterm exam with a grade of at least 15/30 have access to the final partial exam on Section 2 of the course. Students with a grade lower than 15/30 in the midterm exam must sit the general written exam.
For students taking partial exams, the written exam grade (WE) is the simple average of the grades obtained in the two partial exams.
- Group Assignment (GA) – weight=25%:
Students will be assigned to a group. Each group should develop a report on a topic chosen by group members among the proposed ones.
Group assignments are aimed at verifying students’ ability of working in teams and their capacity of writing formal reports on economic issues.
Peer evaluation: Students will be asked to evaluate groupmates’ effort in the group project. In case of insufficient participation, the grade of the group project will not be considered for the free rider student.
Peer evaluation serves two important purposes. On the one hand, it is used to deter free riding; on the other hand, it recognizes the importance of developing skills in evaluating peers and collegues.
- Class discussions (CD) – up to 2 additional points:
Four themes of discussion (0.5 points each) will be proposed to students in a dedicated online forum in Blackboard. This activity is aimed at assessing students’ skills of critical thinking and their ability of developing and properly expressing their personal ideas on the economic issues proposed, as well as their interaction abilities.
These discussions will give students additional points that will be added to the calculated grade.
Two cases must be distinguished:
- If GA > WE: the final grade is the weighted average of the grades obtained in the written exam and the group assignment plus the additional points obtained with class discussions.
Final grade = 0.75 * WE + 0.25*GA + CD
- Otherwise, the final grade is equal to the grade obtained in the written exam, plus the additional points obtained with the class discussions.
Final grade = WE + CD
Note: This rule implies that the group assignment can only improve on the exam grade.
Class slides and readings represent the teaching materials of the course.
All class slides and readings are compulsory exam materials and have to be carefully prepared for the exam independently from the time allocated to them in class.
- Section 1:
- Lecture Notes: Money, Finance and the Business Cycle. Economics and Politics. A Primer.
- Lecture Slides
- Section 2:
- Lecture Slides
- P. KRUGMAN, M. MELITZ, M. OBSTFELD, International Economics: Theory and Policy, Global edition, 12th edition, 2022 (ISBN-13: 9781292409719), Pearson. Chapters 1-8 [KMO]. Selected chapters by topic:
- Introduction: Key concepts and facts - KMO: Chapter 1-2
- The Ricardian Model: labor productivity and comparative advantage - KMO: Chapter 3
- The Heckscher-Ohlin Model: factor intensity and factor endowments - KMO: Chapter 5
- The “Standard Trade Model”: countries’ differences and gains from trade - KMO: Chapter 6
- Market Power and Imperfect Competition: market power and firm selection - KMO: Chapter 8.
- Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises - KMO: Chapter 8