Course 2017-2018 a.y.

Classes: 31 (I sem.)

Instructors:
Class 31: DONATO MASCIANDARO

The course offers a panoramic view of the evolution of economic ideas from classical political economy to the recent developments in macroeconomic and microeconomic theory. In macroeconomics, the depth and breadth of the Great Crisis motivate an overall reconsideration of the relationships between the evolution of macroeconomic ideas and the design and implementation of the concrete economic policies, both in Europe and in the US. In microeconomics, the recent rise of behavioural economics motivates an analogous reconsideration of the evolution of economic ideas concerning decision making, prices, and markets.

Introduction.

• The Great Crisis: What Went Wrong? Reconsidering the Role of the Economic Ideas.

Part I Classical Political Economy and the Early History of Microeconomics.

• Classical Political Economy.
• The Marginal Revolution.
• The Ordinal Revolution.
• The Birth of Game Theory.

Part II The Recent History of Microeconomic.

• The Axiomatization of Utility Theory.
• The Theory of Risky Decisions.
• The Rise of Behavioral Economics.

Part III Keynesianism, Monetarism, New Classical Macroeconomics and beyond.

• Macroeconomics before Keynes.
• Great depression and Keynesianism.
• Another view: Monetarism.
• Great Inflation and New Classical Macroeconomics.
• Great Crisis and Clashing Approaches.

Written general exam.
The exam texts is the same for all the students, including those who attended the course in the previous years.
The questions of the exam are four and compulsory (time=100 minutes). The grade of each question is 7.50/30; to pass the exam the overall grade has to be at least 18/30.
Mock exam questions are discussed during the course.

• I. MOSCATI, From Classical Political Economy to Behavioral Economics, Egea, 2012.
• I. MOSCATI, How Economists Came to Accept Expected Utility Theory: The Case of Samuelson and Savage, Journal of Economic Perspectives, 2016, available at https://www.aeaweb.org/issues/414.
• D. MASCIANDARO, Macroeconomic Ideas and Business Cycles: One Size Doesn’t Fit, available at http://papers.ssrn.com//sol3/papers.cfm?abstract_id=2529980.
• D. MASCIANDARO, D. ROMELLI, Ups and Downs of Central Bank Independence from the Great Inflation to the Great Recession: Theory, Institutions and Empirics, Financial History Review, 2015, available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2591904.

Previous exposure to first-year undergraduate macroeconomic and microeconomic courses is necessary and compulsory. For example

• Microeconomics: B.D. BERNHEIM, M.D. WHINSTON, Microeconomics, McGraw-Hill.
• Macroeconomics: O. BLANCHARD, Macroeconomics, Pearson.