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Economics (codice 91948)

Curriculum: Global Economy and Business del corso di Global economy and business
Programmazione per l'A.A.: 2020/2021

Appelli d'esame: Calendario - Prenotazioni
Orari del corso di Global economy and business: apri


Crediti Formativi Universitari (CFU): 12,00
Settore Scientifico Disciplinare (SSD): SECS-P/01
Ambito disciplinare: Economico
Attività: Attività formative caratterizzanti (B)
Ore aula: 84

Canale unico
  • Docente: NISTICO' SERGIO Scheda informativa del docente NISTICO'
  • Docente: ZEZZA GENNARO Scheda informativa del docente ZEZZA

Obiettivi:
Cognitive / Knowledge skills
• Understand the cost-benefit approach to explaining individual economic choices;
• Manage and understand, both graphically and analytically, the rational choice models of consumers’ behavior both under perfect information and uncertainty;
• Manage and understand, both graphically and analytically, how firms’ behavior can be modeled in different market forms;
• Understand the notions of market failures and their implications for social welfare;
• Develop an understanding of the concept of macroeconomic performance, both in terms of output and employment.
• Evaluate the situation of any country on the basis of its macroeconomic data.
• Understand the different roles of fiscal and monetary policies and of the main macroeconomic actors, the Government and the Central Banks;
• Understand the working of the specific tools of monetary and fiscal policies.

Analytical / Critical Thinking Skills(Oral and Written)
• Discuss, both graphically and analytically, typical trade offs in choice problems;
• Apply the relevant economic models to address real-world economic problems;
• Be able to explain in non-technical terms the fundamental economic intuitions associated with the alternative models of firms' behaviour.
• Be able to identify the assumptions, the logic and the economic policy suggestions of the different macroeconomic models;
• Use macroeconomic theoretical frameworks as tools for the analysis of current events;
• Analyze basic macroeconomic data referred to variables such as prices, money supply, government deficit and employment
• Be able to assess the appropriateness of country specific fiscal and monetary policies relative to the main macroeconomic indicators and the declared objectives of the Government and of the Central Bank.

Programma:
Course Title:
ECONOMICS
Period: second semester

Instructors
SERGIO NISTICO' and ELEONORA SANFILIPPO
contact information: s.nistico@unicas.it; e.sanfilippo@unicas.it

Prerequisites: basic economics. Language of Instruction: English

Overall Class hours: 84
Class hours, part I:42
Class hours, part II: 42
Overall Credits (ECTS): 12

This course is structured in two modules that will be taught in parallel during the semester.

The first module deals with microeconomics, i.e. the set of tools economists use to study the choices made by individuals in their roles of consumers, employees, investors and business managers and the effects of individual choices on market outcomes.
In particular, this first module focuses on:
• rational choice theory and its claim that changes in income and prices are the determinants of consumer’s consumption choices;
• the expected utility theory approach., the demand for insurance policies and the limitations of the rational choice theory;
• the difference between short-run and long-run cost functions;
• how firms choose inputs, output and prices according to the different market structures in which they operate;
• the notion of Pareto optimality and the two fundamental welfare theorems;
• why public goods and externalities represent the two main reasons for market failures and government intervention.

The second module deals with the fundamental macroeconomics models, and their ability to interpret the real-world economic phenomena. The topics addressed by the instructor include the factors affecting changes in aggregate variables, such as GDP, unemployment rates, aggregate demand, aggregate supply, interest rates, price levels, and so on , in the context of contemporary monetary market economies.
In particular, this second module focuses on:
• the fundamental building blocks of Keynes’s macroeconomic theory;
• the structure and the logic of the IS-LM model as a tool to determine the general equilibrium and the impact of economic policies both in a closed and an open economy;
• the determinants of aggregate variables and how both fiscal and monetary policies can be effective tools for dampening business cycle and counteracting the main pathologies affecting actual economic systems, such as recession, unemployment, and crisis;
• the main causes of unemployment and how to promote employment according to the different theoretical approaches;
• the main determinants of economic growth;
• how financial markets affect the real economy;
• the relation between short-term and long-term interest rates through the yield curve and how expectations of financial markets are influenced by the behavior of central bank and the level of economic activity.

With reference to all topics listed above, students will be asked to develop a critical attitude towards the realism and the soundness of the assumptions underlying the various models and the ability to use the relevant elements of the economists’ toolbox to specific case studies.

INSTRUCTIONAL FORMAT
The class will meet for 2 hours (gross of interclass break), four times a week, for a total of 42 sessions. In every week, one of the sessions will be devoted to exercise and case studies. After an introduction aimed at providing the needed background, participants are required to read the materials related to the class and to be prepared prior to coming to class. Classes will consist of a lecture by the instructor, to be followed by a discussion of the main topics and, possibly, of the assignments.

TENTATIVE COURSE SCHEDULE

Week 1 (Frank, chapters 1 and 2. Blanchard, chapters 1 and 2)

Part I
Introduction to the Course. Presentation of the Available materials. Clear Statement of Expected Mutual Requirements. The role of economic models. Thinking like an economist. Is Economics a Science? Graphing as one of the language of Economics: the budget constraint and indifference curves.

Part II
Introduction to the Course. Endogenous/exogenous variables and given factors. The distinction between short-run, medium-run and long-run models. Fundamental macroeconomic variables. Main economic indicators.

Week 2 (Frank, Chapters 2 and 3. Blanchard, chapter 3)

Part I
Axioms of rational choice theory. The opportunity cost and the marginal rate of substitution. The best feasible bundle. The utility function approach.

Part II
The goods market. Main assumptions of Keynes’s model. The determination of the equilibrium level of the aggregate output using the Keynesian cross-diagram. The concept of underemployment equilibrium level of the output.

Week 3 (Frank, appendix chapter 3 and appendix chapter 4. Blanchard, chapter 4)

Part I
The utility function approach. The income and substation effects of price change. The ordinary and the income compensated demand curve.

Part II
Financial Markets. Keynes’s theory of liquidity preference. Money supply and the determination of the equilibrium nominal interest rate. Two cases of ineffectiveness of expansionary monetary policy in Keynes’s model: Inelasticity of Investments and Liquidity Trap.

Week 4 (Frank, chapter 5. Blanchard, chapters 5 and 6)

Part I
Applications of rational choice theory. The intertemporal choice

Part II
The IS-LM basic model for the determination of the general equilibrium position in a closed economy. Assumptions and results. Structure of the model and differences with Keynes’s model. Graphical derivation of the IS and LM curves. Analysis of the impact of fiscal and monetary policies on the general equilibrium position. Policy mix. The extended IS-LM model. The relation between real interest rate, nominal interest rate and expected inflation. Financial shocks and economic policies.

Week 5 (Frank, chapter 6 and appendix. Blanchard, chapter 7 and appendix)

Part I
Incomplete information and choices under uncertainty. The expected utility theory and its limits

Part II
Neoclassical theory of employment versus Keynes’s theory of employment. New-Keynesian theories of the labour market. Contract theory and efficiency-wage theory. The natural rate of unemployment.

Week 6 (Frank, chapters 7 and 8. Blanchard, chapter 10)

Part I
Explaining altruism and concerns about fairness. Cognitive limitations and behavioral economics.

Part II
Solow’s model of growth. Assumptions and main results. The depreciation per worker and the investment per worker. The steady state position.

Mid-term exam on both part I and part II

Week 7 (Frank, chapter 9 and appendix; chapter 10. Blanchard, chapter 11 and appendix)

Part I
Production and costs in the short run. Production in the long run: isoquants, isocosts and returns to scale. Cost functions in the long run.

Part II
Output, investment and capital accumulation. The saving rate. The dynamics of capital and output. The effects of different saving rates on output per worker in an economy with and without technological progress. The human capital. Exogenous and endogenous growth.

Week 8 (Frank, appendix chapter 10 and chapter 11. Blanchard, chapter 14)

Part I
Relationship between short-run and long-run cost curves. Cost minimization. The long-run industry supply curve in perfect competition

Part II

Financial markets and expectations. The determination of stock prices. Stock prices and economic activity. The analysis of the impact of economic policies on stock prices by using the IS-LM diagram. The speculative bubbles. The yield curve. The relation between short-term and long term interest rates.

Week 9 (Frank, chapter 12. Blanchard, chapters 17 and 18)

Part I
Monopoly and the divergence between price and marginal revenue. Mark up and price elasticity of demand. Price discrimination. Public policy towards monopoly.

Part II
The open economy. The equilibrium of the goods market in the open economy. The real exchange rate and the nominal exchange rate. The choice between domestic and foreign assets: the (uncovered) interest parity condition.

Week 10 (Frank, chapter 13. Blanchard, chapters 19 and 20)

Part I
Imperfect competition, oligopoly and game theory. The notion of Nash equilibrium. The Cournot model of duopoly and other economic models of imperfect competition.

Part II
The extension of the IS-LM model to the open economy. Equations and diagrams. Exchange rate regimes and monetary and fiscal policies.

Week 11 (Frank, chapter 16 and chapter 18W. Blanchard, chapter 23)

Part I
Externalities, property rights and Coase theorem. Public goods. The general equilibrium model of exchange and the Edgeworth box. Pareto optimality and the two welfare theorems.

Part II
Monetary Policy. Money targeting. Inflation targeting. The interest rate rule. The Optimal Inflation rate. Conventional and unconventional monetary tools.

WORKLOAD EXPECTATIONS
All students are expected to spend at least 2.5 hours of time on academic studies outside of, and in addition to, each hour of class time.

Testi:
Listed below are the required course textbooks and additional readings. These are required materials for the course and you are expected to have constant access to them from the very beginning of the course for reading, highlighting and note-taking. It is required that you have unrestricted access to each. Access to additional sources required for certain class sessions may be provided in paper or electronic format consistent with applicable copyright legislation.

REQUIRED TEXTS:
Frank, R.H. Microeconomics and Behavior, Mc Graw Hill, 7th(or later)edition.
Blanchard, Macroeconomics, Chapters 1-7, 10-11, 14, 17-19, 20, 23. Pearson 2017, 7th edition
Recommended readings (to be selected and assigned throughout the semester): The following primary and secondary materials, articles and readings are either available on the web or will be provided in Pdf format by the instructor through the GOMP and/or MOODLE platforms.
A series of Robert H. Frank’s articles published on the New York Times
Ball, L. The case for 4% inflation,VOX CEPR's Policy Portal, May 24, 2013
Blanchard, O. What Size Fiscal Deficits for the United States?, Peterson Institute for International Economics, Nov 21, 2016.
Blanchard, O. The State of Advanced Economies and Related Policy Debates: A Fall 2016 Assessment,Peterson Institute for International Economics, Policy Brief, 16-14 2016.
Blanchard, O. How the Eurozone Can Be Strengthened After Brexit, Peterson Institute for International Economics, June 27, 2016.
De Long, B. We Really Do Need a 4%/Year Inflation Target, Bradford-delong.com: Grasping Reality with Both Hands, May 26, 2013
Feldstein, M. Japan's growth strategy is all wrong, Project Syndicate, Jan 18, 2013
Krugman, P. Japan Steps out,The New York Times,Jan13, 2013

Online Reference & Research Tools:

1) www.economist.com
The website of The Economist contains data updated twice a day on output, unemployment, exchange rates, inflation, interest rates and stock prices for a large number of countries.

2) www.imf.org/external/index.htm
The website of the International Monetary Fund provides data on 187 member countries. A particularly useful publication is the World Economic Outlook, which is published twice a year and describes major economic events in the world and in specific member countries.

Specific and updated data on monetary aggregates and policies are also to be found on the websites of the US Federal Reserve and the European Central Bank:
3) www.federalreserve.gov

4) http://www.ecb.int


Economics (codice 91948)

Curriculum: Dual Degree with Samara State University of Economics del corso di Global economy and business
Programmazione per l'A.A.: 2020/2021

Appelli d'esame: Calendario - Prenotazioni
Orari del corso di Global economy and business: apri


Crediti Formativi Universitari (CFU): 12,00
Settore Scientifico Disciplinare (SSD): SECS-P/01
Ambito disciplinare: Economico
Attività: Attività formative caratterizzanti (B)
Ore aula: 84

Canale unico

Obiettivi:
Cognitive / Knowledge skills
• Understand the cost-benefit approach to explaining individual economic choices;
• Manage and understand, both graphically and analytically, the rational choice models of consumers’ behavior both under perfect information and uncertainty;
• Manage and understand, both graphically and analytically, how firms’ behavior can be modeled in different market forms;
• Understand the notions of market failures and their implications for social welfare;
• Develop an understanding of the concept of macroeconomic performance, both in terms of output and employment.
• Evaluate the situation of any country on the basis of its macroeconomic data.
• Understand the different roles of fiscal and monetary policies and of the main macroeconomic actors, the Government and the Central Banks;
• Understand the working of the specific tools of monetary and fiscal policies.

Analytical / Critical Thinking Skills(Oral and Written)
• Discuss, both graphically and analytically, typical trade offs in choice problems;
• Apply the relevant economic models to address real-world economic problems;
• Be able to explain in non-technical terms the fundamental economic intuitions associated with the alternative models of firms' behaviour.
• Be able to identify the assumptions, the logic and the economic policy suggestions of the different macroeconomic models;
• Use macroeconomic theoretical frameworks as tools for the analysis of current events;
• Analyze basic macroeconomic data referred to variables such as prices, money supply, government deficit and employment
• Be able to assess the appropriateness of country specific fiscal and monetary policies relative to the main macroeconomic indicators and the declared objectives of the Government and of the Central Bank.

Programma:
Course Title:
ECONOMICS
Period: second semester

Instructors
SERGIO NISTICO' and ELEONORA SANFILIPPO
contact information: s.nistico@unicas.it; e.sanfilippo@unicas.it

Prerequisites: basic economics. Language of Instruction: English

Overall Class hours: 84
Class hours, part I:42
Class hours, part II: 42
Overall Credits (ECTS): 12

This course is structured in two modules that will be taught in parallel during the semester.

The first module deals with microeconomics, i.e. the set of tools economists use to study the choices made by individuals in their roles of consumers, employees, investors and business managers and the effects of individual choices on market outcomes.
In particular, this first module focuses on:
• rational choice theory and its claim that changes in income and prices are the determinants of consumer’s consumption choices;
• the expected utility theory approach., the demand for insurance policies and the limitations of the rational choice theory;
• the difference between short-run and long-run cost functions;
• how firms choose inputs, output and prices according to the different market structures in which they operate;
• the notion of Pareto optimality and the two fundamental welfare theorems;
• why public goods and externalities represent the two main reasons for market failures and government intervention.

The second module deals with the fundamental macroeconomics models, and their ability to interpret the real-world economic phenomena. The topics addressed by the instructor include the factors affecting changes in aggregate variables, such as GDP, unemployment rates, aggregate demand, aggregate supply, interest rates, price levels, and so on , in the context of contemporary monetary market economies.
In particular, this second module focuses on:
• the fundamental building blocks of Keynes’s macroeconomic theory;
• the structure and the logic of the IS-LM model as a tool to determine the general equilibrium and the impact of economic policies both in a closed and an open economy;
• the determinants of aggregate variables and how both fiscal and monetary policies can be effective tools for dampening business cycle and counteracting the main pathologies affecting actual economic systems, such as recession, unemployment, and crisis;
• the main causes of unemployment and how to promote employment according to the different theoretical approaches;
• the main determinants of economic growth;
• how financial markets affect the real economy;
• the relation between short-term and long-term interest rates through the yield curve and how expectations of financial markets are influenced by the behavior of central bank and the level of economic activity.

With reference to all topics listed above, students will be asked to develop a critical attitude towards the realism and the soundness of the assumptions underlying the various models and the ability to use the relevant elements of the economists’ toolbox to specific case studies.

INSTRUCTIONAL FORMAT
The class will meet for 2 hours (gross of interclass break), four times a week, for a total of 42 sessions. In every week, one of the sessions will be devoted to exercise and case studies. After an introduction aimed at providing the needed background, participants are required to read the materials related to the class and to be prepared prior to coming to class. Classes will consist of a lecture by the instructor, to be followed by a discussion of the main topics and, possibly, of the assignments.

TENTATIVE COURSE SCHEDULE

Week 1 (Frank, chapters 1 and 2. Blanchard, chapters 1 and 2)

Part I
Introduction to the Course. Presentation of the Available materials. Clear Statement of Expected Mutual Requirements. The role of economic models. Thinking like an economist. Is Economics a Science? Graphing as one of the language of Economics: the budget constraint and indifference curves.

Part II
Introduction to the Course. Endogenous/exogenous variables and given factors. The distinction between short-run, medium-run and long-run models. Fundamental macroeconomic variables. Main economic indicators.

Week 2 (Frank, Chapters 2 and 3. Blanchard, chapter 3)

Part I
Axioms of rational choice theory. The opportunity cost and the marginal rate of substitution. The best feasible bundle. The utility function approach.

Part II
The goods market. Main assumptions of Keynes’s model. The determination of the equilibrium level of the aggregate output using the Keynesian cross-diagram. The concept of underemployment equilibrium level of the output.

Week 3 (Frank, appendix chapter 3 and appendix chapter 4. Blanchard, chapter 4)

Part I
The utility function approach. The income and substation effects of price change. The ordinary and the income compensated demand curve.

Part II
Financial Markets. Keynes’s theory of liquidity preference. Money supply and the determination of the equilibrium nominal interest rate. Two cases of ineffectiveness of expansionary monetary policy in Keynes’s model: Inelasticity of Investments and Liquidity Trap.

Week 4 (Frank, chapter 5. Blanchard, chapters 5 and 6)

Part I
Applications of rational choice theory. The intertemporal choice

Part II
The IS-LM basic model for the determination of the general equilibrium position in a closed economy. Assumptions and results. Structure of the model and differences with Keynes’s model. Graphical derivation of the IS and LM curves. Analysis of the impact of fiscal and monetary policies on the general equilibrium position. Policy mix. The extended IS-LM model. The relation between real interest rate, nominal interest rate and expected inflation. Financial shocks and economic policies.

Week 5 (Frank, chapter 6 and appendix. Blanchard, chapter 7 and appendix)

Part I
Incomplete information and choices under uncertainty. The expected utility theory and its limits

Part II
Neoclassical theory of employment versus Keynes’s theory of employment. New-Keynesian theories of the labour market. Contract theory and efficiency-wage theory. The natural rate of unemployment.

Week 6 (Frank, chapters 7 and 8. Blanchard, chapter 10)

Part I
Explaining altruism and concerns about fairness. Cognitive limitations and behavioral economics.

Part II
Solow’s model of growth. Assumptions and main results. The depreciation per worker and the investment per worker. The steady state position.

Mid-term exam on both part I and part II

Week 7 (Frank, chapter 9 and appendix; chapter 10. Blanchard, chapter 11 and appendix)

Part I
Production and costs in the short run. Production in the long run: isoquants, isocosts and returns to scale. Cost functions in the long run.

Part II
Output, investment and capital accumulation. The saving rate. The dynamics of capital and output. The effects of different saving rates on output per worker in an economy with and without technological progress. The human capital. Exogenous and endogenous growth.

Week 8 (Frank, appendix chapter 10 and chapter 11. Blanchard, chapter 14)

Part I
Relationship between short-run and long-run cost curves. Cost minimization. The long-run industry supply curve in perfect competition

Part II

Financial markets and expectations. The determination of stock prices. Stock prices and economic activity. The analysis of the impact of economic policies on stock prices by using the IS-LM diagram. The speculative bubbles. The yield curve. The relation between short-term and long term interest rates.

Week 9 (Frank, chapter 12. Blanchard, chapters 17 and 18)

Part I
Monopoly and the divergence between price and marginal revenue. Mark up and price elasticity of demand. Price discrimination. Public policy towards monopoly.

Part II
The open economy. The equilibrium of the goods market in the open economy. The real exchange rate and the nominal exchange rate. The choice between domestic and foreign assets: the (uncovered) interest parity condition.

Week 10 (Frank, chapter 13. Blanchard, chapters 19 and 20)

Part I
Imperfect competition, oligopoly and game theory. The notion of Nash equilibrium. The Cournot model of duopoly and other economic models of imperfect competition.

Part II
The extension of the IS-LM model to the open economy. Equations and diagrams. Exchange rate regimes and monetary and fiscal policies.

Week 11 (Frank, chapter 16 and chapter 18W. Blanchard, chapter 23)

Part I
Externalities, property rights and Coase theorem. Public goods. The general equilibrium model of exchange and the Edgeworth box. Pareto optimality and the two welfare theorems.

Part II
Monetary Policy. Money targeting. Inflation targeting. The interest rate rule. The Optimal Inflation rate. Conventional and unconventional monetary tools.

WORKLOAD EXPECTATIONS
All students are expected to spend at least 2.5 hours of time on academic studies outside of, and in addition to, each hour of class time.

Testi:
Listed below are the required course textbooks and additional readings. These are required materials for the course and you are expected to have constant access to them from the very beginning of the course for reading, highlighting and note-taking. It is required that you have unrestricted access to each. Access to additional sources required for certain class sessions may be provided in paper or electronic format consistent with applicable copyright legislation.

REQUIRED TEXTS:
Frank, R.H. Microeconomics and Behavior, Mc Graw Hill, 7th(or later)edition.
Blanchard, Macroeconomics, Chapters 1-7, 10-11, 14, 17-19, 20, 23. Pearson 2017, 7th edition
Recommended readings (to be selected and assigned throughout the semester): The following primary and secondary materials, articles and readings are either available on the web or will be provided in Pdf format by the instructor through the GOMP and/or MOODLE platforms.
A series of Robert H. Frank’s articles published on the New York Times
Ball, L. The case for 4% inflation,VOX CEPR's Policy Portal, May 24, 2013
Blanchard, O. What Size Fiscal Deficits for the United States?, Peterson Institute for International Economics, Nov 21, 2016.
Blanchard, O. The State of Advanced Economies and Related Policy Debates: A Fall 2016 Assessment,Peterson Institute for International Economics, Policy Brief, 16-14 2016.
Blanchard, O. How the Eurozone Can Be Strengthened After Brexit, Peterson Institute for International Economics, June 27, 2016.
De Long, B. We Really Do Need a 4%/Year Inflation Target, Bradford-delong.com: Grasping Reality with Both Hands, May 26, 2013
Feldstein, M. Japan's growth strategy is all wrong, Project Syndicate, Jan 18, 2013
Krugman, P. Japan Steps out,The New York Times,Jan13, 2013

Online Reference & Research Tools:

1) www.economist.com
The website of The Economist contains data updated twice a day on output, unemployment, exchange rates, inflation, interest rates and stock prices for a large number of countries.

2) www.imf.org/external/index.htm
The website of the International Monetary Fund provides data on 187 member countries. A particularly useful publication is the World Economic Outlook, which is published twice a year and describes major economic events in the world and in specific member countries.

Specific and updated data on monetary aggregates and policies are also to be found on the websites of the US Federal Reserve and the European Central Bank:
3) www.federalreserve.gov

4) http://www.ecb.int


Economics (codice 91948)

Curriculum: Dual Degree Unicas - Epoka University del corso di Global economy and business
Programmazione per l'A.A.: 2020/2021

Appelli d'esame: Calendario - Prenotazioni
Orari del corso di Global economy and business: apri


Crediti Formativi Universitari (CFU): 12,00
Settore Scientifico Disciplinare (SSD): SECS-P/01
Ambito disciplinare: Economico
Attività: Attività formative caratterizzanti (B)
Ore aula: 84

Canale unico

Obiettivi:
Cognitive / Knowledge skills
• Understand the cost-benefit approach to explaining individual economic choices;
• Manage and understand, both graphically and analytically, the rational choice models of consumers’ behavior both under perfect information and uncertainty;
• Manage and understand, both graphically and analytically, how firms’ behavior can be modeled in different market forms;
• Understand the notions of market failures and their implications for social welfare;
• Develop an understanding of the concept of macroeconomic performance, both in terms of output and employment.
• Evaluate the situation of any country on the basis of its macroeconomic data.
• Understand the different roles of fiscal and monetary policies and of the main macroeconomic actors, the Government and the Central Banks;
• Understand the working of the specific tools of monetary and fiscal policies.

Analytical / Critical Thinking Skills(Oral and Written)
• Discuss, both graphically and analytically, typical trade offs in choice problems;
• Apply the relevant economic models to address real-world economic problems;
• Be able to explain in non-technical terms the fundamental economic intuitions associated with the alternative models of firms' behaviour.
• Be able to identify the assumptions, the logic and the economic policy suggestions of the different macroeconomic models;
• Use macroeconomic theoretical frameworks as tools for the analysis of current events;
• Analyze basic macroeconomic data referred to variables such as prices, money supply, government deficit and employment
• Be able to assess the appropriateness of country specific fiscal and monetary policies relative to the main macroeconomic indicators and the declared objectives of the Government and of the Central Bank.

Programma:
Course Title:
ECONOMICS
Period: second semester

Instructors
SERGIO NISTICO' and ELEONORA SANFILIPPO
contact information: s.nistico@unicas.it; e.sanfilippo@unicas.it

Prerequisites: basic economics. Language of Instruction: English

Overall Class hours: 84
Class hours, part I:42
Class hours, part II: 42
Overall Credits (ECTS): 12

This course is structured in two modules that will be taught in parallel during the semester.

The first module deals with microeconomics, i.e. the set of tools economists use to study the choices made by individuals in their roles of consumers, employees, investors and business managers and the effects of individual choices on market outcomes.
In particular, this first module focuses on:
• rational choice theory and its claim that changes in income and prices are the determinants of consumer’s consumption choices;
• the expected utility theory approach., the demand for insurance policies and the limitations of the rational choice theory;
• the difference between short-run and long-run cost functions;
• how firms choose inputs, output and prices according to the different market structures in which they operate;
• the notion of Pareto optimality and the two fundamental welfare theorems;
• why public goods and externalities represent the two main reasons for market failures and government intervention.

The second module deals with the fundamental macroeconomics models, and their ability to interpret the real-world economic phenomena. The topics addressed by the instructor include the factors affecting changes in aggregate variables, such as GDP, unemployment rates, aggregate demand, aggregate supply, interest rates, price levels, and so on , in the context of contemporary monetary market economies.
In particular, this second module focuses on:
• the fundamental building blocks of Keynes’s macroeconomic theory;
• the structure and the logic of the IS-LM model as a tool to determine the general equilibrium and the impact of economic policies both in a closed and an open economy;
• the determinants of aggregate variables and how both fiscal and monetary policies can be effective tools for dampening business cycle and counteracting the main pathologies affecting actual economic systems, such as recession, unemployment, and crisis;
• the main causes of unemployment and how to promote employment according to the different theoretical approaches;
• the main determinants of economic growth;
• how financial markets affect the real economy;
• the relation between short-term and long-term interest rates through the yield curve and how expectations of financial markets are influenced by the behavior of central bank and the level of economic activity.

With reference to all topics listed above, students will be asked to develop a critical attitude towards the realism and the soundness of the assumptions underlying the various models and the ability to use the relevant elements of the economists’ toolbox to specific case studies.

INSTRUCTIONAL FORMAT
The class will meet for 2 hours (gross of interclass break), four times a week, for a total of 42 sessions. In every week, one of the sessions will be devoted to exercise and case studies. After an introduction aimed at providing the needed background, participants are required to read the materials related to the class and to be prepared prior to coming to class. Classes will consist of a lecture by the instructor, to be followed by a discussion of the main topics and, possibly, of the assignments.

TENTATIVE COURSE SCHEDULE

Week 1 (Frank, chapters 1 and 2. Blanchard, chapters 1 and 2)

Part I
Introduction to the Course. Presentation of the Available materials. Clear Statement of Expected Mutual Requirements. The role of economic models. Thinking like an economist. Is Economics a Science? Graphing as one of the language of Economics: the budget constraint and indifference curves.

Part II
Introduction to the Course. Endogenous/exogenous variables and given factors. The distinction between short-run, medium-run and long-run models. Fundamental macroeconomic variables. Main economic indicators.

Week 2 (Frank, Chapters 2 and 3. Blanchard, chapter 3)

Part I
Axioms of rational choice theory. The opportunity cost and the marginal rate of substitution. The best feasible bundle. The utility function approach.

Part II
The goods market. Main assumptions of Keynes’s model. The determination of the equilibrium level of the aggregate output using the Keynesian cross-diagram. The concept of underemployment equilibrium level of the output.

Week 3 (Frank, appendix chapter 3 and appendix chapter 4. Blanchard, chapter 4)

Part I
The utility function approach. The income and substation effects of price change. The ordinary and the income compensated demand curve.

Part II
Financial Markets. Keynes’s theory of liquidity preference. Money supply and the determination of the equilibrium nominal interest rate. Two cases of ineffectiveness of expansionary monetary policy in Keynes’s model: Inelasticity of Investments and Liquidity Trap.

Week 4 (Frank, chapter 5. Blanchard, chapters 5 and 6)

Part I
Applications of rational choice theory. The intertemporal choice

Part II
The IS-LM basic model for the determination of the general equilibrium position in a closed economy. Assumptions and results. Structure of the model and differences with Keynes’s model. Graphical derivation of the IS and LM curves. Analysis of the impact of fiscal and monetary policies on the general equilibrium position. Policy mix. The extended IS-LM model. The relation between real interest rate, nominal interest rate and expected inflation. Financial shocks and economic policies.

Week 5 (Frank, chapter 6 and appendix. Blanchard, chapter 7 and appendix)

Part I
Incomplete information and choices under uncertainty. The expected utility theory and its limits

Part II
Neoclassical theory of employment versus Keynes’s theory of employment. New-Keynesian theories of the labour market. Contract theory and efficiency-wage theory. The natural rate of unemployment.

Week 6 (Frank, chapters 7 and 8. Blanchard, chapter 10)

Part I
Explaining altruism and concerns about fairness. Cognitive limitations and behavioral economics.

Part II
Solow’s model of growth. Assumptions and main results. The depreciation per worker and the investment per worker. The steady state position.

Mid-term exam on both part I and part II

Week 7 (Frank, chapter 9 and appendix; chapter 10. Blanchard, chapter 11 and appendix)

Part I
Production and costs in the short run. Production in the long run: isoquants, isocosts and returns to scale. Cost functions in the long run.

Part II
Output, investment and capital accumulation. The saving rate. The dynamics of capital and output. The effects of different saving rates on output per worker in an economy with and without technological progress. The human capital. Exogenous and endogenous growth.

Week 8 (Frank, appendix chapter 10 and chapter 11. Blanchard, chapter 14)

Part I
Relationship between short-run and long-run cost curves. Cost minimization. The long-run industry supply curve in perfect competition

Part II

Financial markets and expectations. The determination of stock prices. Stock prices and economic activity. The analysis of the impact of economic policies on stock prices by using the IS-LM diagram. The speculative bubbles. The yield curve. The relation between short-term and long term interest rates.

Week 9 (Frank, chapter 12. Blanchard, chapters 17 and 18)

Part I
Monopoly and the divergence between price and marginal revenue. Mark up and price elasticity of demand. Price discrimination. Public policy towards monopoly.

Part II
The open economy. The equilibrium of the goods market in the open economy. The real exchange rate and the nominal exchange rate. The choice between domestic and foreign assets: the (uncovered) interest parity condition.

Week 10 (Frank, chapter 13. Blanchard, chapters 19 and 20)

Part I
Imperfect competition, oligopoly and game theory. The notion of Nash equilibrium. The Cournot model of duopoly and other economic models of imperfect competition.

Part II
The extension of the IS-LM model to the open economy. Equations and diagrams. Exchange rate regimes and monetary and fiscal policies.

Week 11 (Frank, chapter 16 and chapter 18W. Blanchard, chapter 23)

Part I
Externalities, property rights and Coase theorem. Public goods. The general equilibrium model of exchange and the Edgeworth box. Pareto optimality and the two welfare theorems.

Part II
Monetary Policy. Money targeting. Inflation targeting. The interest rate rule. The Optimal Inflation rate. Conventional and unconventional monetary tools.

WORKLOAD EXPECTATIONS
All students are expected to spend at least 2.5 hours of time on academic studies outside of, and in addition to, each hour of class time.

Testi:
Listed below are the required course textbooks and additional readings. These are required materials for the course and you are expected to have constant access to them from the very beginning of the course for reading, highlighting and note-taking. It is required that you have unrestricted access to each. Access to additional sources required for certain class sessions may be provided in paper or electronic format consistent with applicable copyright legislation.

REQUIRED TEXTS:
Frank, R.H. Microeconomics and Behavior, Mc Graw Hill, 7th(or later)edition.
Blanchard, Macroeconomics, Chapters 1-7, 10-11, 14, 17-19, 20, 23. Pearson 2017, 7th edition
Recommended readings (to be selected and assigned throughout the semester): The following primary and secondary materials, articles and readings are either available on the web or will be provided in Pdf format by the instructor through the GOMP and/or MOODLE platforms.
A series of Robert H. Frank’s articles published on the New York Times
Ball, L. The case for 4% inflation,VOX CEPR's Policy Portal, May 24, 2013
Blanchard, O. What Size Fiscal Deficits for the United States?, Peterson Institute for International Economics, Nov 21, 2016.
Blanchard, O. The State of Advanced Economies and Related Policy Debates: A Fall 2016 Assessment,Peterson Institute for International Economics, Policy Brief, 16-14 2016.
Blanchard, O. How the Eurozone Can Be Strengthened After Brexit, Peterson Institute for International Economics, June 27, 2016.
De Long, B. We Really Do Need a 4%/Year Inflation Target, Bradford-delong.com: Grasping Reality with Both Hands, May 26, 2013
Feldstein, M. Japan's growth strategy is all wrong, Project Syndicate, Jan 18, 2013
Krugman, P. Japan Steps out,The New York Times,Jan13, 2013

Online Reference & Research Tools:

1) www.economist.com
The website of The Economist contains data updated twice a day on output, unemployment, exchange rates, inflation, interest rates and stock prices for a large number of countries.

2) www.imf.org/external/index.htm
The website of the International Monetary Fund provides data on 187 member countries. A particularly useful publication is the World Economic Outlook, which is published twice a year and describes major economic events in the world and in specific member countries.

Specific and updated data on monetary aggregates and policies are also to be found on the websites of the US Federal Reserve and the European Central Bank:
3) www.federalreserve.gov

4) http://www.ecb.int


Economics (codice 91948)

Curriculum: Dual Degree Epoka University - Unicas del corso di Global economy and business
Programmazione per l'A.A.: 2020/2021

Appelli d'esame: Calendario - Prenotazioni
Orari del corso di Global economy and business: apri


Crediti Formativi Universitari (CFU): 12,00
Settore Scientifico Disciplinare (SSD): SECS-P/01
Ambito disciplinare: Economico
Attività: Attività formative caratterizzanti (B)
Ore aula: 48

Canale unico

Obiettivi:

Programma:
Course Title:
ECONOMICS
Period: second semester

Instructors
SERGIO NISTICO' and ELEONORA SANFILIPPO
contact information: s.nistico@unicas.it; e.sanfilippo@unicas.it

Prerequisites: basic economics. Language of Instruction: English

Overall Class hours: 84
Class hours, part I:42
Class hours, part II: 42
Overall Credits (ECTS): 12

This course is structured in two modules that will be taught in parallel during the semester.

The first module deals with microeconomics, i.e. the set of tools economists use to study the choices made by individuals in their roles of consumers, employees, investors and business managers and the effects of individual choices on market outcomes.
In particular, this first module focuses on:
• rational choice theory and its claim that changes in income and prices are the determinants of consumer’s consumption choices;
• the expected utility theory approach., the demand for insurance policies and the limitations of the rational choice theory;
• the difference between short-run and long-run cost functions;
• how firms choose inputs, output and prices according to the different market structures in which they operate;
• the notion of Pareto optimality and the two fundamental welfare theorems;
• why public goods and externalities represent the two main reasons for market failures and government intervention.

The second module deals with the fundamental macroeconomics models, and their ability to interpret the real-world economic phenomena. The topics addressed by the instructor include the factors affecting changes in aggregate variables, such as GDP, unemployment rates, aggregate demand, aggregate supply, interest rates, price levels, and so on , in the context of contemporary monetary market economies.
In particular, this second module focuses on:
• the fundamental building blocks of Keynes’s macroeconomic theory;
• the structure and the logic of the IS-LM model as a tool to determine the general equilibrium and the impact of economic policies both in a closed and an open economy;
• the determinants of aggregate variables and how both fiscal and monetary policies can be effective tools for dampening business cycle and counteracting the main pathologies affecting actual economic systems, such as recession, unemployment, and crisis;
• the main causes of unemployment and how to promote employment according to the different theoretical approaches;
• the main determinants of economic growth;
• how financial markets affect the real economy;
• the relation between short-term and long-term interest rates through the yield curve and how expectations of financial markets are influenced by the behavior of central bank and the level of economic activity.

With reference to all topics listed above, students will be asked to develop a critical attitude towards the realism and the soundness of the assumptions underlying the various models and the ability to use the relevant elements of the economists’ toolbox to specific case studies.

INSTRUCTIONAL FORMAT
The class will meet for 2 hours (gross of interclass break), four times a week, for a total of 42 sessions. In every week, one of the sessions will be devoted to exercise and case studies. After an introduction aimed at providing the needed background, participants are required to read the materials related to the class and to be prepared prior to coming to class. Classes will consist of a lecture by the instructor, to be followed by a discussion of the main topics and, possibly, of the assignments.

TENTATIVE COURSE SCHEDULE

Week 1 (Frank, chapters 1 and 2. Blanchard, chapters 1 and 2)

Part I
Introduction to the Course. Presentation of the Available materials. Clear Statement of Expected Mutual Requirements. The role of economic models. Thinking like an economist. Is Economics a Science? Graphing as one of the language of Economics: the budget constraint and indifference curves.

Part II
Introduction to the Course. Endogenous/exogenous variables and given factors. The distinction between short-run, medium-run and long-run models. Fundamental macroeconomic variables. Main economic indicators.

Week 2 (Frank, Chapters 2 and 3. Blanchard, chapter 3)

Part I
Axioms of rational choice theory. The opportunity cost and the marginal rate of substitution. The best feasible bundle. The utility function approach.

Part II
The goods market. Main assumptions of Keynes’s model. The determination of the equilibrium level of the aggregate output using the Keynesian cross-diagram. The concept of underemployment equilibrium level of the output.

Week 3 (Frank, appendix chapter 3 and appendix chapter 4. Blanchard, chapter 4)

Part I
The utility function approach. The income and substation effects of price change. The ordinary and the income compensated demand curve.

Part II
Financial Markets. Keynes’s theory of liquidity preference. Money supply and the determination of the equilibrium nominal interest rate. Two cases of ineffectiveness of expansionary monetary policy in Keynes’s model: Inelasticity of Investments and Liquidity Trap.

Week 4 (Frank, chapter 5. Blanchard, chapters 5 and 6)

Part I
Applications of rational choice theory. The intertemporal choice

Part II
The IS-LM basic model for the determination of the general equilibrium position in a closed economy. Assumptions and results. Structure of the model and differences with Keynes’s model. Graphical derivation of the IS and LM curves. Analysis of the impact of fiscal and monetary policies on the general equilibrium position. Policy mix. The extended IS-LM model. The relation between real interest rate, nominal interest rate and expected inflation. Financial shocks and economic policies.

Week 5 (Frank, chapter 6 and appendix. Blanchard, chapter 7 and appendix)

Part I
Incomplete information and choices under uncertainty. The expected utility theory and its limits

Part II
Neoclassical theory of employment versus Keynes’s theory of employment. New-Keynesian theories of the labour market. Contract theory and efficiency-wage theory. The natural rate of unemployment.

Week 6 (Frank, chapters 7 and 8. Blanchard, chapter 10)

Part I
Explaining altruism and concerns about fairness. Cognitive limitations and behavioral economics.

Part II
Solow’s model of growth. Assumptions and main results. The depreciation per worker and the investment per worker. The steady state position.

Mid-term exam on both part I and part II

Week 7 (Frank, chapter 9 and appendix; chapter 10. Blanchard, chapter 11 and appendix)

Part I
Production and costs in the short run. Production in the long run: isoquants, isocosts and returns to scale. Cost functions in the long run.

Part II
Output, investment and capital accumulation. The saving rate. The dynamics of capital and output. The effects of different saving rates on output per worker in an economy with and without technological progress. The human capital. Exogenous and endogenous growth.

Week 8 (Frank, appendix chapter 10 and chapter 11. Blanchard, chapter 14)

Part I
Relationship between short-run and long-run cost curves. Cost minimization. The long-run industry supply curve in perfect competition

Part II

Financial markets and expectations. The determination of stock prices. Stock prices and economic activity. The analysis of the impact of economic policies on stock prices by using the IS-LM diagram. The speculative bubbles. The yield curve. The relation between short-term and long term interest rates.

Week 9 (Frank, chapter 12. Blanchard, chapters 17 and 18)

Part I
Monopoly and the divergence between price and marginal revenue. Mark up and price elasticity of demand. Price discrimination. Public policy towards monopoly.

Part II
The open economy. The equilibrium of the goods market in the open economy. The real exchange rate and the nominal exchange rate. The choice between domestic and foreign assets: the (uncovered) interest parity condition.

Week 10 (Frank, chapter 13. Blanchard, chapters 19 and 20)

Part I
Imperfect competition, oligopoly and game theory. The notion of Nash equilibrium. The Cournot model of duopoly and other economic models of imperfect competition.

Part II
The extension of the IS-LM model to the open economy. Equations and diagrams. Exchange rate regimes and monetary and fiscal policies.

Week 11 (Frank, chapter 16 and chapter 18W. Blanchard, chapter 23)

Part I
Externalities, property rights and Coase theorem. Public goods. The general equilibrium model of exchange and the Edgeworth box. Pareto optimality and the two welfare theorems.

Part II
Monetary Policy. Money targeting. Inflation targeting. The interest rate rule. The Optimal Inflation rate. Conventional and unconventional monetary tools.

WORKLOAD EXPECTATIONS
All students are expected to spend at least 2.5 hours of time on academic studies outside of, and in addition to, each hour of class time.

Testi:
Listed below are the required course textbooks and additional readings. These are required materials for the course and you are expected to have constant access to them from the very beginning of the course for reading, highlighting and note-taking. It is required that you have unrestricted access to each. Access to additional sources required for certain class sessions may be provided in paper or electronic format consistent with applicable copyright legislation.

REQUIRED TEXTS:
Frank, R.H. Microeconomics and Behavior, Mc Graw Hill, 7th(or later)edition.
Blanchard, Macroeconomics, Chapters 1-7, 10-11, 14, 17-19, 20, 23. Pearson 2017, 7th edition
Recommended readings (to be selected and assigned throughout the semester): The following primary and secondary materials, articles and readings are either available on the web or will be provided in Pdf format by the instructor through the GOMP and/or MOODLE platforms.
A series of Robert H. Frank’s articles published on the New York Times
Ball, L. The case for 4% inflation,VOX CEPR's Policy Portal, May 24, 2013
Blanchard, O. What Size Fiscal Deficits for the United States?, Peterson Institute for International Economics, Nov 21, 2016.
Blanchard, O. The State of Advanced Economies and Related Policy Debates: A Fall 2016 Assessment,Peterson Institute for International Economics, Policy Brief, 16-14 2016.
Blanchard, O. How the Eurozone Can Be Strengthened After Brexit, Peterson Institute for International Economics, June 27, 2016.
De Long, B. We Really Do Need a 4%/Year Inflation Target, Bradford-delong.com: Grasping Reality with Both Hands, May 26, 2013
Feldstein, M. Japan's growth strategy is all wrong, Project Syndicate, Jan 18, 2013
Krugman, P. Japan Steps out,The New York Times,Jan13, 2013

Online Reference & Research Tools:

1) www.economist.com
The website of The Economist contains data updated twice a day on output, unemployment, exchange rates, inflation, interest rates and stock prices for a large number of countries.

2) www.imf.org/external/index.htm
The website of the International Monetary Fund provides data on 187 member countries. A particularly useful publication is the World Economic Outlook, which is published twice a year and describes major economic events in the world and in specific member countries.

Specific and updated data on monetary aggregates and policies are also to be found on the websites of the US Federal Reserve and the European Central Bank:
3) www.federalreserve.gov

4) http://www.ecb.int


[Ultima modifica: mercoledì 30 novembre 2016]