78448 - Topics in Economic Policy

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 challenges.

In the second module (Prof. Bolatto), students are introduced to the main current themes and debates in international political economy: trade agreements, global imbalances, monetary unions and exchange rate agreements, financial crises.

MODULE 1: Prof. Riccardo Rovelli (14 lectures)

Part 1. Overview: policy prescriptions & main issues

1. Introduction & Course overview

2. The best of all possible micro worlds: Efficiency

2.1 - Dissenting evidence 1

3. The best of all possible macro worlds: Full employment and growth

3.1 - Dissenting evidence 2

Part 2. Institutions, policies and open debates

4. Efficiency and market failures

4.1 - Examples and solutions

5. Modes of economic relations: not only markets. Three pillars and their roles

6. Institutions: What they are; Why they matter

6.1 - Brief overviews of: property rights, money, finance, corporations, trust

6.2 - Institutions and politics

6.3 - Varieties of capitalisms. The role of the state

7. The limits of markets

7.1 - Two cases: Ethical markets; Minimum wages. Discussion.

Intermediate test

MODULE 2: Prof. Stefano Bolatto (14 lectures)

A. Political economy of international trade agreements (4 lectures)

1. Introduction to trade policy

2. Motives for trade agreements

3. Design of trade agreements

4. Regional trade agreements

B. Global imbalances and the world’s financial stability (4 lectures)

1. Intertemporal approach to current accounts and global imbalances

2. Excess foreign debt and external adjustment

3. Valuation effects: evidence for developed and developing countries

4. Debate on global financial stability and the role of the U.S. as a global liquidity provider

C. Exchange rate regimes and monetary unions (4 lectures):

1. Floating exchange rates versus currency peg

2. Speculative attacks

3. Time inconsistency of the Central banks and monetary unions

4. Optimal currency areas: old versus new theories

Macroeconomic policy in the time of financial crisis (2 lectures)

1. Current account reversals and currency crises: recent episodes

2. Sovereign debt crises: recent episodes

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

ERASMUS STUDENTS AND STUDENTS FROM THE BOLOGNA CAMPUS PLEASE NOTICE:

All lectures and exams will be located at the FORLI' CAMPUS. No activities take place in Bologna.

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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.

Class discussion and interactions will be enhanced through the use of “Kahoot” or “Wooclap”.

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

Assessment methods

For students attending class ("Studenti frequentanti"), the final mark is equal to the sum of the points obtained from each module. If the sum is equal to 31 or 32, the final mark is "30 e lode".

Module 1 (Maximum 16 points). Students can choose:

Option A: written answers to 4 out of 7 questions (max 8 points; time: 1 hr), plus a short essay (max 8 points; max 3000 words or 5 pages). 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: written answers to 8 out of 10 questions (no essay; max 16 points; time: 1h 30').

Module 2 (Maximum 16 points)

Written test, which requires to answer 1 open-ended questions and a series of multiple choice questions (max 11 points; time: 45'), plus one between a short essay and an in-class group presentation (max 5 points each)

Essay/ class presentation (Module 2). Students may form a group (the number of members will vary with the number of students opting for this mode) and choose a specific topic to discuss in class, among a list provided by the instructor (together with the corresponding references). Topics generally refer to recent episodes of macroeconomic crises. Each presentations will last 20 minutes. Alternatively, each student may decide not to present in class, and deliver a short essay (max 10 pages long) individually.

The test for Module 1 (“Intermediate test”) will be taken at the end of the lectures for these modules, i.e. after the end of the first 14 lectures.

The test for Module 2 (“Final test”) will be taken instead after the end of all lectures.

All written tests will be performed on a PC. 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.

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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 all two modules), with the same examination program as for the students who have attended class. (Time: 3h 30').

Teaching tools

Lectures are supported by PC-based presentations.

Class interactions will be enhanced through the use of Kahoot or Wooclap.

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.

Office hours

See the website of Riccardo Rovelli

See the website of Stefano Antonio Bolatto