30490 - FISCAL MACROECONOMICS
Course taught in English
Go to class group/s: 31
Class 31: CARLO COTTARELLI
To feel comfortable in this course, you should be familiar with basic macroeconomics.
With the return to fiscal policy activism in the aftermath of the 2008-09 global economic and financial crisis, the interest in the role that fiscal policy can play in affecting macroeconomic developments has been revived. At the same time, the surge in public debt-to-GDP ratios in most advanced economies, together with some public debt market crises especially within the Euro area, have raised concerns about public debt sustainability. This course allows students to understand the constraints set on fiscal policy by the need to ensure the sustainability of public debt, the role that fiscal policy can play within those constraints to support economic activity, and the institutions that can strengthen fiscal policy credibility, including fiscal rules, medium-term fiscal programs and spending reviews. Case studies are used to illustrate these issues.
- Definitions of fiscal sustainability, fiscal solvency, the government intertemporal budget constraint, no-Ponzi game condition:
- Public debt ratio dynamics.
- Definition of public debt sustainability.
- Empirical approached to assessing fiscal sustainability.
- Ensuring fiscal sustainability.
- Empirical approaches to assessing debt sustainability.
- Entitlement debt.
- Public debt and money.
- Public finance data.
- Main macrofiscal trends in the last ten years.
- Lowering public debt.
- Workshops: Should Greece restructure its public debt? and Should Italy restructure its public debt?
- Fiscal policy and growth:
- Fiscal policy and short-term growth.
- Fiscal policy and long term growth.
- Workshop: should fiscal policy be expanded or tightened in advanced economies?
- Fiscal Institutions:
- Fiscal rules.
- The SGP.
- Medium-Term Fiscal Frameworks.
- Fiscal Transparency and Fiscal Councils.
- Spending reviews.
- Fiscal Issues for subnational governments and fiscal federations.
- Public financial management: the budgetary process, preparation, execution, reporting, key budget documents, fiscal risks.
- The budgetary process: key documents and timing.
- Recognize the key elements of fiscal policies.
- Identify the role that fiscal policies can play in affecting macroeconomic developments.
- Discuss concerns about public debt sustainability in the Euro zone.
- Evaluate the role that fiscal policy can play to support economic activity.
- Describe the impact of fiscal institutions such as: fiscal rules, medium-term fiscal programs and spending reviews.
- Analyze macrofiscal trends.
- Interpret technical reports of international institutions on fiscal developments and risk.
- Argue the validity of specific estimation and testing methods of fiscal imbalances and risks.
- Face-to-face lectures
- Interactive class activities (role playing, business game, simulation, online forum, instant polls)
In addition to face-to-face lectures, the course includes students' interactive discussion on pre-assigned topics (workshops). These activities allow students to apply the tools introduced during the course and evaluate the effects of fiscal policy on fiscal and debt sustainability. Students are encouraged to share their own views and ask questions to the workshop presenters.
|Continuous assessment||Partial exams||General exam|
Written exam with open-ended questions.
Slides and lecture notes are available to the students on Bboard after each class.