B2204 - MACROECONOMIC MODELS FOR POLICY ANALYSIS

Learning outcomes

The course aims at familiarizing the student with the tools that Macroeconomics offers for the analysis of the most relevant issues in the policy debate. The student will be expected to be familiar with and to use models explaining the short-run determinants of aggregate demand, consumption and investment; to be able to analyze problems concerning the determinants of unemployment and the labor market outcomes; to be familiar with and be able to analyze the sustainability of public debt and its effects on the economy; to be familiar with and be able to analyze the determinants o of inflation and the scope for monetary policy.

Course contents

The course will cover topics in concerning Fiscal Policy, Monetary Policy and Unemployment

Part 1 Monetary Policy

-Inflation, Money Growth and Interest rules
- The terms structure of Interest Rates
- Stabilization Policy and interest rate Rules
- Dynamic Inconsistency of Low Inflation Monetary Policy
- The Zero Lower Bound on Nominal Interest Rates

Part 2 Fiscal Policy:

- The Government Budget Constraint and Ricardian Equivalence
- Tax Smoothing and Optimal Tax Policy
- Political-Economy Theories of Budget Deficit
- Sovereign Debt Crises

Part 3 Unemployment

- The Efficiency Wage Model
- Search and Matching Models
- Implicit Contracts,
- Insider-Outsider Model

 

Readings/Bibliography

David Romer (R), Advanced Macroeconomics, McGraw Hill, 2019 (5th ed) .

Slides and lecture notes

Teaching methods

Frontal Lectures and Classes with TA

Assessment methods

Evaluation of homework and inal written exam

Teaching tools

Lecture notes and slides on virtuale

Office hours

See the website of Paolo Luciano Adalberto Manasse