Course 2022-2023 a.y.


Department of Economics

Course taught in English
Go to class group/s: 31
BEMACS (6 credits - II sem. - OP  |  SECS-P/01)
Course Director:

Classes: 31 (II sem.)

Class-group lessons delivered  on campus

Suggested background knowledge

To feel comfortable in this course, you should be familiar with basic macroeconomics.

Mission & Content Summary


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.

Intended Learning Outcomes (ILO)


At the end of the course student will be able to...
  • 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.


At the end of the course student will be able to...
  • 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.

Teaching methods

  • Face-to-face lectures
  • Exercises (exercises, database, software etc.)
  • Case studies /Incidents (traditional, online)
  • Group assignments


In addition to face-to-face lectures, the course includes students' participation in group exercises/assignments. 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 throughout the course.

Assessment methods

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


Attending students will complete group assignments and/or exercises as part of Your Final Course Grade. Students must receive a pass (at least 18/30) on both midterm written exams or the final written exam to pass the course. A breakdown of the grading structure will be provided in the detailed course syllabus.


Students must receive a pass (at least 18/30) on both midterm written exams or the final written exam to pass the course. The final written exam for non-attending students comprises 100% of the course final grade.

Teaching materials


Slides or lecture notes will be made available to the students on Bboard where available

Last change 23/12/2022 15:29