78448 - Topics in Economic Policy

Academic Year 2020/2021

Learning outcomes

The course provides an introduction and overview of some main points of debate on the economic policies of contemporary societies. Using historical and contemporary examples, and simple models and data sets, students understand the importance of well-designed and well-functioning economic institutions and policies and the complexity of economic governance. In particular, teaching activity is divided in three parts or modules, with the purpose of encouraging and enabling students to: (1) Identify the main “policy issues” in contemporary capitalist societies, reflecting on the roles and limits of markets and of the state, and on how well-designed institutions may improve the performance of markets and the effectiveness of governance mechanisms. (2) Analize, in reference to both historical and contemporary examples, the main issues that arise around the governance of common goods. (3) Familiarize with the methods and tools used by economists to analyze labor market issues, access research by leading experts and discuss policy issues that are of particular relevance for the labor market (such as the gender wage gap, youth unemployment in Europe, the efficacy of youth labor market programs, the formalization of informal jobs in developing countries, self-employment and poverty in developing countries, the costs of worker displacement in developed and emerging economies, and labor market adjustment in the Great Recession).

Course contents

The course is divided in two modules.

In the first module (Prof. Rovelli), students first review the main policy prescriptions from established micro and macro theories, and are encouraged to challenge them with relevant examples of institutional or policy failures. In the second part, students are invited to explore how capitalist societies have built institutions and adopted policies to address some of those failures, and to discuss which institutions and policies may be needed to address (some of the) current and future challenges.

In the second module (Prof. Montinari), students are provided with a general overview of how principles and methods of behavioral economics can be used to improve welfare and design better and more effective policies.

MODULE 1: Prof. Riccardo Rovelli (14 lectures)

Part 1. Overview: policy prescriptions & main issues

1. Introduction & Course overview (1 lecture)

2. The best of all possible micro worlds: Efficiency (2 lectures)

  • Dissenting views: Is Pareto Efficiency all that matters? Or, does it matter at all?

3. The best of all possible macro worlds: Full employment and growth (2 lectures)

  • Dissenting views: Does Growth require Inequality? Does Growth lead towards (In)Equality?

Part 2. Institutions and policies: some open debates

4. Efficiency and market failures (2 lectures)

  • Competition vs Monopoly: Is it that simple?
  • Infrastructures
  • Externalities: Coase vs other solutions
  • Global Public Goods

5. Modes of economic relations: not only markets (1 lecture)

  • Markets and alternative modes of economic relations
  • Reciprocity, redistribution and exchange
  • The nature of firms: Coase and beyond
  • The State: Market rules, Command and Redistribution
  • Non-market production, consumption and exchange

6. Institutions: What they are; Why they matter (4 lectures)

  • Brief overviews of: property rights, money, finance, corporations, trust
  • Institutions and politics. Capitalism and democracy
  • Varieties of capitalisms. The role of the state

7. The limits of markets (2 lectures)

  • Ethical markets
  • A firm's objectives: Friedman vs. SCR
  • Minimum wages.

Intermediate test

MODULE 2: Prof. Natalia Montinari (10 lectures)

  1. Behavioral Economics in Theory (3 lectures)
    1. Individual Decision making
    2. Other regarding preferences
  2. Behavioral Economics in Action: Nudging (2 lectures)
    1. Nudging or sludging?
    2. Other tools of behavioral change
    3. Designing your nudge in 10 steps
  3. Applications of Nudging (5 lectures)
    1. Spending, Saving and Financial Decisions
    2. Health and wellbeing
    3. Education
    4. Energy Efficiency and the Environment
    5. Tax Compliance
    6. Developing Countries

Final test

 

Readings/Bibliography

For each module, a dedicated website will contain all the required readings and documents, including the lecture notes.

Details about each website and the required readings (scholarly articles, book chapters and internet documents) will be provided in the first lecture of each module.

Teaching methods

  • Classes for the first module (14 classes) will meet on MS TEAMS.
  • Classes for the second module (10 classes) will take place also in a "physical" class, where students are admitted up to the available (based on safety procedures) number of seats. If demand for seats exceeds availability, students will be divided into groups, and will alternate between physical and digital class.
  • Please notice that all lectures in presence will take place at the Forlì Campus. No activities take place at the Bologna Campus.
  • Students that so desire may follow all lectures remotelyon MS TEAMS.

***

Lectures will be supported by PC-based presentations. Students should download and read these presentations (and possibly the related readings) before lectures.

Students are encouraged to take an active part in many class discussions. During classes on MS TEAMS, students are expected to interact with the teacher (and with each other) via the "Chat" line.

Students will also be taught and encouraged to search for and obtain relevant information (data; official documents; academic literature; policy analyses) through the Internet.

Assessment methods

For students who attend classes ("Studenti frequentanti") and take the intermediate test (after Module 1) and final test (after Module 2), the final mark is equal to the sum of the points obtained from the two tests. The two tests are described below:

Module 1 (Maximum 18 points). Students can choose:

Option A:

  • Intermediate test: written answers to 3 out of 5 questions (max 9 points; 45 minutes)
  • plus a short essay (max 9 points; 2000-3000 words). The essay title must be chosen before the date of the intermediate test, and must be approved by the instructor. In general, it will involve a (literature-based) assessment of some policy-relevant issue, related to a topic discussed during lectures.

Option B:

  • "Long" Intermediate test: written answers to 6 out of 7 questions (no essay; max 18 points; time: 1h 30').

Module 2 (Max 12 points). Students can choose:

  • Option A: written answers to 3 out of 5 questions (max 6 points; time: 30 minutes), plus a short essay designing a nudge intervention (max 6 points; max 3000 words or 5 pages). The essay topic and title must be chosen before the date of the intermediate test, and must be approved by the instructor. In general, it will involve a (literature-based) assessment of some policy-relevant issue and the design of a nudging intervention, related to a topic discussed during lectures.
  • Option B: written answers to 6 out of 9 questions (no essay; max 12 points; time: 1h).

For both modules:

  • An extra point may be given to students who have been especially active in class debates and for particularly good final essays. Students who obtain overall 31 or 32 points will be given full marks "cum laude".

Written tests will be performed either on PCs located in the LABIC laboratory or remotely. Students who take the exams remotely must have installed ZOOM on their PC and must connect to the exam on EOL (https://eol.unibo.it/).

One test may be missed exclusively for grave reasons (to be authorized explicitly), in which case it will have to be taken in the first “appello di esami” in the June session.

***

Students who do not attend lectures (“non frequentanti”), or who do not show up at the written tests, will take a single written test in a regular exam session (“prova totale”).

This test will require short answers (max 250 words) to several questions (from both modules), with the same examination program as for the students who have attended class. (Time: 2h).

Teaching tools

Lectures are supported by PC-based presentations.

Lecture notes, required readings and internet resources are accessible from dedicated websites (one for each module). The Internet address will be communicated during the first lecture of each module.

A password will be required to access the required readings.

During online classes on MS TEAMS, students are expected to interact with the teacher (and with each other) via the "Chat" line.

Office hours

See the website of Riccardo Rovelli

See the website of Natalia Montinari

SDGs

Decent work and economic growth Reduced inequalities Climate Action

This teaching activity contributes to the achievement of the Sustainable Development Goals of the UN 2030 Agenda.