Macroeconomics II (20841)
Degree/study: degree in Business Management and Administration
Year: second
Term: third
Number of ECTS credits: 6
Hours of study dedication: 150
Language or languages of instruction: English-Spanish
Professor: Christian Matthes, Nicola Gennaioli
1. Presentation of the subject
Macroeconomía II is a fundamental course in the curriculum of IBE, ECO and ADE. The objective of the course is to allow students to familiarize with the methodology and the main results of macroeconomic research. This course, together with Macroeconomía I should be viewed as providing students with a broad background on contemporary macroeconomic issues.
2. Competences to be attained
Increasing competence in using standard macroeconomic models (IS-LM,AS-AD). Understanding what are the major macroeconomic questions associated with the paradigm of rational expectations and how macroeconomists have tackled them, both in closed and open-economy contexts.
3. Contents
This course extends the treatment of Macroeconomics carried out in Macroeconomía I. Particular emphasis is devoted to the analysis of : i) the role of expectations in macroeconomics, ii) the working of macroeconomic policy in open economies, and iii) the implications of rational expectations for optimal economic policy. In particular, the following topics will be considered: a) Expectations in macroeconomics, b) the open economy: exchange rates and policy choices, c) macroeconomic pathologies in the real world, d) should policymakers be restrained?, and e) the macroeconomic of the European union.
4. Assessment
Final grade
The final grade will depend on a final exam (80%) and on the grades of 6 weekly assignments (20%) that must be handed in to the seminar TA every week.
Grade in the September Exam
The grade in the September exam will depend on the exam itself (90%) and on the grades of the weekly assignments (10%) done by the student during the course.
5. Bibliography and teaching resources
5.1. Basic bibliography
• Blanchard, O., Amighini, A., and giavazzi, F., Macroeconomics: a European Perspective, Pearson Limited, 2010
5.2. Additional bibliography
- Blanchard, O., Perez Enri, D., Macroeconomía: Teoría y Política Económica con Aplicaciones a América Latina, Pearson Limited, 2000
5.3. Teaching resources
- Powerpoint slides will be made available on Aula Global
6. Methodology
The course lasts for 10 weeks. The instructor will teach 16 classes of theory for the entire class, but there will also be 9 hours of seminar for each of the four groups each class is divided in. Seminars will take place in the last 6 weeks of the course. Seminars will be used (by the instructor and by teaching assistants) to deepen the understanding of the class material as well as to review the solutions to the weekly assignments.
7. Activities Planning
The following topics will be covered in the order below, (chapter numbers refer to the main textbook):
I. Expectations
Chapter 14 (Classes 1 and 2) Expectations: the Basic Tools
Chapter 15 (Classes 3 and 4) Financial Markets and Expectations
Chapter 16 (Classes 4 and 5) Expectations, Consumption, and Investment
Chapter 17 (Classes 6 and 7) Expectations, Output, and Policy
II. The Open Economy: Exchange rates and policy choices
Chapter 18 (Class 8 and 9) Output, the interest rate and the exchangerate
Chapter 19 (Class 10) Exchange Rate Regimes
III. Pathologies
Chapter 20 (Class 11) The crisis of 2007-2010
Chapter 21 (Class 12) High Debt
Chapter 22 (Class 13) High Inflation
IV. Should Policymakers Be Restrained?
Chapter 23 (Class 14) Policy and Policymakers: What Do We Know?
Chapter 24 (Class 15) Monetary and Fiscal Policy Rules
V. Europe in progress
Chapter 25 (Class 16) European Economic and Monetary Integration
Chapter 26 (Class 16) The Euro: The Ins and the Outs