96340 - POLITICAL ECONOMY

Conoscenze e abilità da conseguire

The goal of this course is to discuss current topics in political economics. Thus, the course will address questions such as: what are the political and institutional determinants of fiscal policy and macroeconomic policy in modern democracies? Which features of political institutions are more likely to foster economic development? At the end of the class student has knowledge on using the concepts and tools of the new political economy to analyze current topics in this field. Student is able to analyze issues such as: - the interaction between politics and economics in shaping macroeconomic policies in modern democracies; - the role of political institutions in the process of economic growth and development. The course is meant to train students to understand how policy decisions are made, and how they can be improved.

Contenuti

Erasmus students: Please note that you cannot take this course if you have not yet taken a course in Microeconomics AND a course in econometrics.

Note that this syllabus may be subject to changes; thus, please make sure you are checking the most updated version of the syllabus.

This version was last changed on April 12, 2024.

Topic 1: Introduction
Correlation vs. causation, omitted variable bias, institutions and socio-economic performance

 

Topic 2: Externalities
The first fundamental theorem of welfare economics, externalities, climate change

 

Topic 3: Aggregating individual preferences
The Condorcet paradox, Arrow’s impossibility theorem, restrictions on preferences, the median voter theorem, Downsian competition, the Meltzer-Richard's model

 

Topic 4: Social capital
What is social capital? Why does it matter? What is the relationship between mass media and social capital?

 

-- First midterm --

 

Topic 5: Discrimination and inequality
Statistical and taste-based discrimination, with applications to the US labor market, gender discrimination in Italian middle schools, and cricket playing in India

 

Topic 6: The future of the knowledge economy
Labor, automation, and the regulation of artificial intelligence

 

Topic 7: Voter turnout
Causes and consequences of voter participation

 

Topic 8: Polarization and Populism

 

-- Second midterm --

Testi/Bibliografia

The course has no single textbook. Readings and teaching materials (e.g., slides, notes, exercises) for each class will be published on the university platform VIRTUALE: https://virtuale.unibo.it/

Below are some of the readings that I will cover, fully or partly, during classes. This list is partial and will likely be updated before and/or during the course. A thorough understanding of many of these readings requires technical skills beyond what students are expected to have at this point in their academic careers. In such cases, in class I will present simplified versions of the underlying theoretical models (for theory readings) or an introductory review of the econometric results (for empirical readings).

To get access to any Harvard Business Case Studies used in the course (e.g., in discussing externalities), please wait for instructions from the lecturer. Specifically, about one week before each case study-based class, the lecturer will send a message on Virtuale explaining where and how to download the relevant cases.

 

Topic 1: Introduction

Required readings:

• Acemoglu, Daron, “Why Nation-Building Failed in Afghanistan.” Project Syndicate, August 20, 2021, https://www.project-syndicate.org/commentary/afghanistan-top-down-state-building-failed-again-by-daron-acemoglu-2021-08 Last Access: February 12, 2024.
• Acemoglu, Daron, Suresh Naidu, Pascual Restrepo, and James A. Robinson, “Democracy Does Cause Growth.” Journal of Political Economy, 2019, 127 (1): 47-100.
• Acemoglu, Daron, and James A. Robinson, “Why Nations Fail.” The New York Review of Books, June 7, 2012. https://www.nybooks.com/articles/2012/08/16/why-nations-fail/ Last Access: February 12, 2024.
• Dell, Melissa, “The Persistent Effects of Peru’s Mining Mita.” Econometrica, 2010, 78 (6): 1863-1903.
• Diamond, Jared, “What Makes Countries Rich or Poor?” The New York Review of Books, June 7, 2012. https://www.nybooks.com/articles/2012/06/07/what-makes-countries-rich-or-poor/?lp_txn_id=1524960 Last Access: February 12, 2024.

Highly recommended readings:

• Angrist, Joshua D., and Jörn-Steffen Pischke, “Mastering ‘Metrics: The Path from Cause to Effect.” Princeton University Press. (Chapters 4 and 5).
• Diamond, Jared, “Guns, Germs, and Steel: The Fates of Human Societies (20th Anniversary Edition).” W. W. Norton & Company.

 

Topic 2: Externalities

Required readings:

• Instructor’s notes
• Pons, Vincent, Amram Migdal, and Mike Lynch. “Climate Change: Paris, and the Road Ahead.” Harvard Business School Case 718-038, March 2018. (Revised January 2019.)

 

Topic 3: Aggregating individual preferences

Required readings:

• Instructor’s notes
  

Highly recommended readings:

• Acemoglu, Daron, Suresh Naidu, Pascual Restrepo, and James A. Robinson, “Chapter 21 – Democracy, Redistribution, and Inequality” in Handbook of Income Distribution, edited by Anthony B. Atkinson and François Bourguignon, Volume 2B, 2015, Elsevier, 1885-1966.
• Hall, Andrew B., “What Happens When Extremists Win Primaries?”, The American Political Science Review, 2015, 109 (1): 18-42.
• Poole, Keith T., and Howard Rosenthal, “Patterns of Congressional Voting.” American Journal of Political Science, 1991, 35 (1): 228-278.

 

Topic 4: Social capital

Required readings:

• DellaVigna, Stefano, and Ethan Kaplan, “The Fox News Effect: Media Bias and Voting.” Quarterly Journal of Economics, 2007, 122 (3), 1187-1234.
• Gentzkow, Matthew, “Television and Voter Turnout.” Quarterly Journal of Eonomics, 2006, 121 (3), 931-972.
• Chetty, R., Jackson, M.O., Kuchler, T. et al. “Social capital I: measurement and associations with economic mobility.” Nature, 2022, 608: 108-121.
• Chetty, R., Jackson, M.O., Kuchler, T. et al. “Social capital II: determinants of economic connectedness.” Nature, 2022, 608: 122-134.

Highly recommended readings:

• Putnam, Robert, “Bowling Alone: The Collapse and Revival of American Community.” 2000. New York: NY (USA): Simon & Schuster.
• Putnam, Robert, Robert Leonardi, and Raffaella Nanetti, “Making Democracy Work: Civic Traditions in Modern Italy.” 1993. Princeton, NJ (USA): Princeton University Press.

 

Topic 5: Discrimination

Required readings:

• Bertrand, Marianne and Sendhil Mullainathan, "Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination," American Economic Review, 2004, 94 (4), 991-1013.
• Carlana, Michela, "Implicit Stereotypes: Evidence from Teachers' Gender Bias," Quarterly Journal of Economics, 2019, 134 (3): 1163-1224.
• Lowe, Matthew, "Types of Contact: A Field Experiment on Collaborative and Adversarial Caste Integration," American Economic Review, 2021, 111 (6): 1807-1844.

Highly recommended readings:

• Black, Sandra, "Do better schools matter? Parental valuation of elementary education," Quarterly Journal of Economics, 1999, 114 (2), 577-599.

Readings for subsequent topics (still to be sorted, as of April 12, 2024):

• Acemoglu, Daron, “It’s Good Jobs Stupid,” EfIP Policy Brief, 2019, https://econfip.org/wp-content/uploads/2019/06/Its-Good-Jobs-Stupid.pdf (last access: July 12, 2023).
• Acemoglu, Daron, Andrea Manera, and Pascual Restrepo, “Does the US Tax Code Favor Automation?” Brookings Papers on Economic Activity, 2020, 231-300.
• Acemoglu, Daron, and Simon Johnson, “Power and Progress,” 2023. New York, NY (USA): PublicAffairs.
• Acemoglu, Daron and Pascual Restrepo, “Robots and Jobs: Evidence from US Labor Markets,” Journal of Political Economy, 2020, 128(61), 2019-2452.
  
• Autor, David, David Dorn, Gordon Hanson, and Kaveh Majlesi, “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure,” American Economic Review, 2020, 110(10), 3139-3183.
  
• Blais, André and Jean-François Daoust, “The Motivation to Vote: Explaining Electoral Participation,” 2020. Vancouver, BC (Canada): University of British Columbia Press.
• Cantoni, Enrico, “A Precinct Too Far: Turnout and Voting Costs,” American Economic Journal: Applied Economics, 2020, 12(1), 61-85.
• Cantoni, Enrico and Vincent Pons, “Does Context Outweigh Individual Characteristics in Driving Voting Behavior? Evidence from Relocations within the U.S.,” American Economic Review, 2022, 112(4), 1226-1272.
• Cantoni, Enrico and Vincent Pons, “Do interactions with candidates increase voter support and participation? Experimental evidence from Italy,” Economics & Politics, 33(2), 379-402
• Cantoni, Enrico and Vincent Pons, “Strict ID Laws Don’t Stop Voters: Evidence from a Nationwide Panel, 2008–2018,” Quarterly Journal of Economics, 2021, 136(4), 2615-2660.
• Fetzer, Thiemo, “Did Austerity Cause Brexit?” American Economic Review, 2019, 109(1), 3849-3886.
• Fujiwara, Thomas, “Voting Technology, Political Responsiveness, and Infant Health: Evidence from Brazil,” Econometrica, 2015, 83(2), 423-464.
• Pons, Vincent, “Will a Five-Minute Discussion Change Your Mind? A Countrywide Experiment on Voter Choice in France,” American Economic Review, 2018, 108(6), 1322-1363.

Metodi didattici

Traditional lectures led by the course lecturer.

There will be two in-class review sessions with the course lecturer: one in the last class before the first mid-term and another one in the last class of the course.

 

Comportment:

My goal is that students learn something by attending class. In this spirit, I ask you to put away your phones and to use portable computers (including tablets) only to take notes. Please, do not do anything else with your PC during class. If, for whatever reason, you cannot stay away from your phone for slightly less than two hours, please avoid coming to class.

Modalità di verifica e valutazione dell'apprendimento

Final written exam of one hour, or two midterm exams of one hour each. The second (and final) midterm can be taken only at the first exam session at the end of the semester.

Each exam will consist of 17 multiple choice questions. The exam will be PC-based and will take place in a PC lab.

During exams (midterm or full exams) students will NOT be allowed to use anything but a pen, pencil, and eraser. That is, students will NOT be allowed to bring materials such as: textbooks, lecture notes/slides; any written notes; web-enabled or data storage devices, or smartphones. Candidates found with such items will be removed from the exam and their work will not be graded.

Only students with a sufficiently high grade in the first midterm exam (i.e., 18 or higher) will be admitted to the second one: other candidates must proceed to the full exams.
For students taking the midterm exams (esami parziali), the final grade for the course will be the arithmetic average of the grades in the two midterm exams.

For students taking the full exam, the grade of the exam is the final grade.

The grading system is on a 0-30 scale. The maximum possible score is 30 cum laude, in case all answers are correct, complete, and formally rigorous. If that is not the case, the following grading scheme applies:

<18 fail
18-23 sufficient
24-27 good
28-30 very good
30 cum laude: excellent

To take the exam, candidates are required to register via the University's electronic service (AlmaEsami). Exam grades will be published on Esami OnLine (EOL).

After exams are graded, students will have the chance to see their graded exam on a date/time/location determined by the lecturers and communicated (via VIRTUALE) to the students.

Students will be allowed to reject their final grade for the course at most ONCE. Upon publishing the exam results, the lecturer will inform students about the deadline to reject their grade. Notification of the intention to reject a grade must be sent in writing (by email). After the date specified, grades will be electronically registered (verbalizzato).

Strumenti a supporto della didattica

Slides, lecture notes, and readings will be available on the platform VIRTUALE: https://virtuale.unibo.it/

Orario di ricevimento

Consulta il sito web di Enrico Cantoni