Course program
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.
Both modules require an active learning approach by students with a recurrent alternance among the three fundamental languages of economic discourse: verbal/ordinary; graphical/numerical; analytical/algebraical.
In particular, this first module focuses on:
- the use of graphical and analytical tools to measure opportunity cost and different forms of budget constraints;
- the rational choice theory under certainty as a possible benchmark to understand what drives actual, real-life economic choices;
- expected values, expected utility theory of rational choice under risk;
- the difference between risk and uncertainty, the essentials of behavioral economics and the paradoxes of rational choice theory under uncertainty;
- the relationship between inputs and output and its impact on firms’ costs;
- short-run and long-run cost functions and the related notion of returns to scale;
- the possible ‘shapes’ of long-run cost functions and their impact on the structure of a sector/industry;
- how firms choose inputs, output and prices according to the different market structures in which they operate;
- the notion of externalities, public goods and related policies.
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, interest rates, price levels, and so on, in the context of contemporary monetary market economies. In particular, this second module focuses on:
- National accounting and definition of key economic variables (Nominal and real GDP, inflation, unemployment, money, etc.).
- GDP and interest rates determination.
- The basic tools of Finance and the role of the Central Bank.
- The impact and functioning of fiscal and monetary policies.
- Understanding economic fluctuations: the IS-LM model.
- Solow’s growth model and the facts about growth.
- Introduction to the open economy.
- The Balance of payment and the exchange rates
- The yield curve.
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.
