Course 2002-2003 a.y.

5114 - MACROECONOMICS


DIEM

Department of Economics

Go to class group/s 16
DIEM (8 credits - I sem. - CC)
Course Head:
LUCA SALA

Classes: 16
Instructors:
Class 16: LUCA SALA

Introduction to the course:


The fundamental goals of the course are to provide an integrated view of Macroeconomics and to equip the student with tools that allow him/her to understand and analyse past and current macroeconomic events. To this end, the course focuses on the functioning of the macroeconomy in both a closed and open-economy setting. The course will start from a static setting and extend to a dynamic view of the economy that sheds light on the workings of the real and the monetary sides of the economy.


Course Content :


PART I: From National Accounts to Macroeconomic Equilibrium

  • What are GDP, GNP and national income? 

  • Static theories determining Consumption, Investment etc  

    • Equilibrium in the Solow model

    • Short-run equilibrium in the Keynesian model (IS-LM) 

    • Medium-run equilibrium in the Keynesian model (AS-AD) and policy implications

  • Introducing a labour market

    • Long-run equilibrium

PART II: Flaws of a static model: going dynamic

  •  The Fischer Model of a simple economy

    • Ricardian Equivalence and policy implications

  •  Introducing several generations (OLG)

    • Effect of pensions 

    • Rationales for pension reforms

  • Infinite horizons (the Ramsey model)

PART III: Monetary Economics and Central Banking

  • The role of money in the IS-LM model and the "neoclassical revolution" 

  • Expectations: the basic tools 

  • The real effects of monetary surprises: the Lucas´ model 

  • The inflationary bias: the Barro-Gordon model

  • Expectations, output and optimal monetary policy

PART IV: The Open Economy

  • The balance of payments and aggregate demand

  • The goods market in an open economy 

  • Openness in goods and financial markets

  • Output, the interest rate and the exchange rate


Textbooks:


Selected chapters from:

  • O. BLANCHARD, Macroeconomics, Prentice-Hall, 2000.

  • P. WEIL, Macroeconomic Theory: A Primer, MIT Press, forthcoming.

  • P.R. KRUGMAN, M. OBSTFELD, International Economics (Theory and Policy), Addison-Wesley, 1997.

For further and continuously updated information consult the IEP web site or contact S.I.D. - Servizio Informazioni Didattica - Via Gobbi, 5 - 3rd floor.  


Examinations:


The exam will be in written form.