03568 - Economic Policy

Learning outcomes

• The first part  (Prof. Rovelli) provides an introduction to the Political Economy of contemporary societies, and an overview of the main fields of economic policies. By using historical and contemporary examples, and simple models and data sets, students will be stimulated to think about the importance of well functioning and well designed economic institutions and policies and also about the complexity of economic governance in democratic, capitalist societies.

• The second part  (Prof. Lehmann) studies the evolution of the labor markets and related policies during the last forty years.   

Course contents

The course is divided in two parts:

I - An Introduction to Political Economy and to the analysis of economic policies (Prof. Rovelli, 36 hours)

II - The evolution of labor markets during the last forty years (Prof. Lehmann, 18 hours)

 

Part I (Riccardo Rovelli):

An Introduction to Political Economy and to the analysis of economic policies

I – The economic “performance” of countries.

• How do we measure growth?
• Why do not all countries grow at the same rate? Did ancient societies grow? What ignites growth?
  
• What does sustainable mean? When does growth become unsustainable? What to do then?

II – Institutions and the economy.

• Different kinds of economic relations. Cooperation, command and exchange. Their historical and functional relations
• Markets and conditions for their efficiency
• Economic analysis of some formal and informal institutions. Propriety rights and the rule of law
  

III – Markets and capitalism.

• From markets to capitalism. Spirit of capitalism
• Capitalism and property rights
• Varieties of capitalism
• Capitalism, equity and inequalities
• Models of the social state
• Limits of the market and limits of the state

IV – Governance and microeconomic policies.

• Governance of market economies. Governance indicators
• Pareto efficiency and Robbins' definition. Limitations of both. Facts and values
• Microeconomic policies for market efficiency: abuse of market power; externalities
• Beyond markets: public and common goods. Endogenous institutions
• Bailouts and other examples of (potential) moral hazard

V – Macroeconomic governance and the Great Recession.

• Stabilization policies: an overview
• From the financial crisis to the global crisis
• The Great Recession: monetary and fiscal policies in the USA and in the EU. Unsustainable debts and austerity policies

VI – Democracy and Reforms.

• Is democracy always desirable? Tyranny of the majority and liberal democracy. Prerequisites of liberal democracy
• Decision models for democracies. Democracy and parties
• Why is it so hard to adopt good reforms? The Political Economy of reforms.

 Part two (Hartmut Lehmann): 

The evolution of labor markets during the last forty years

1. The neo-classsical model of the labor market: demand and supply
2. Globalization, technological progress and the labor market. The effects of international trade, foreign direct investments and “offshoring” on employment, unemployment and income distribution in developed and less-developed countries, from the Eighties until today.
3. Unemployment and active labor market policies in emerging and transition countries: purposes and evaluation of their effects on individual workers. 

 

Readings/Bibliography

For the first part:

• A list of required readings is included in the Dropbox directory reserved for the course, together with the required readings. All the readings are in English.
  

For the second part:

• A list of required readings will be available from:  www2.dse.unibo.it/lehmann  (password protected).

Teaching methods

For the first part:

• The class will meet 18 times, for two hours each time.
• Students will be encouraged to take an active part in all the lectures.

For the second part:

• There will be eight 2-hours lectures.

Assessment methods

The final mark is the sum of points obtained in:

• A first partial written exam, based on 6 open questions, that will take place after the end of the first part of the course (max 12 points).
• A second partial written exam, based on 4 open questions, that will take place after the end of the second part of the course (max 9 points).
• A brief final essay (between 2000 / 3000 words, equivalent to 3-4 pages font TNR 12 or similar, single spaced, in Italian or English) on a theme approved by one of the two Instructors before the end of classes, and to be presented in electronic format at least one week before the exam date (appello di esame)(max 11 points)
  

Teaching tools

Required readings (in English) will be collected and made available during the first week of classes.

Lectures will be supported by PC-based presentations.

Prof. Rovelli: Presentations and required readings are all in English. They are  available on a DROPBOX directory, which is reserved for students registered for the course. Students must email the teacher to ask for a link to this directory. 

Prof. Lehmann:  Power Point presentation and a detailed list of readings will be available from: www2.dse.unibo.it/lehmann (password protected)

Office hours

See the website of Riccardo Rovelli

See the website of Hartmut Lehmann