30545 - FOUNDATIONS OF ECONOMIC SCIENCES
Course taught in English
Go to class group/s: 27
In the interdisciplinary spirit of the entire program, the course mission is to introduce the students to the fundamentals of economic reasoning and show them how these tools can be applied to real world questions. The course's structure is divided into two modules. The first module is methodological in spirit and provides exposure to a set of core economic tools, concepts and ways to understand the world that address real-world challenges. Following the modern approach of the CORE project, the course does not formally distinguish between Microeconomics and Macroeconomics, but blend them into a topics-based approach. Nonetheless, the course will focus on topics that have a more pronounced macroeconomic flavor. The second module builds on the concepts introduced in the first one, but it puts a larger weight on the application of economic models to current topics of interest. This module aims to allow students to analyse the impact of modern technology in an economic framework and provide examples of state-of-the-art economic research that either investigate the impact of in-formation technologies or makes use of methods from computer science. For example, students should develop the critical thinking skills to reflect on topics like AI discrimination and the impact of AI on the labour market.
- Technology, production, and costs
- Scarcity, work, and choice
- Banks, money, and credit markets
- The multiplier and fiscal policy
- Inflation and monetary policy
- Public finance
- Understanding Individual Choices using Machine Learning
- Data as a Good
- Taxation in the Age of Information Technologies
- Growth and Innovation
- Discrimination and AI Bias
- Networks and Social Media
- Blockchain & Bitcoin
- Explain how the main economic variables are defined and measured.
- Understand how product and labor markets operate.
- Illustrate the determinants of the income level, the inflation rate, the unemployment rate, the interest rate, and the debt to income ratio prevailing in an economy.
- Identify the economic effects of monetary and fiscal policies, as well as those of exogenous shocks hitting the economy.
- Describe the interactions between financial markets developments and changes in the economic conditions.
- Summarize the causes of sustainability of the deficits (in the government budget, in the trade balance, etc.) incurred by a country, and their likely consequences.
- Describe how people make choices within the rational choice framework.
- Discern between different types of goods within a market economy.
- Understand how economic growth is driven by capital accumulation and technology adoption.
- Summarize different economic models of discrimination.
- Illustrate how the application of AI technologies can lead to discriminatory outcomes.
- Explain the impact of social media technologies and cryptocurrencies on the economy.
Apply the knowledge acquired during the course to evaluate the likely future evolution of the economic environment where the firm or organization they join at the end of the program operates. In particular, students will be able to:
- Predict the impact of central banks' decisions on the likely evolution of interest rates, aggregate output, aggregate demand, etc..
- Predict the impact of fiscal policy announcements and interventions, and of other shocks, on the same variables.
- Evaluate and compare the economic forecasts and views on the state of the economy made available on the internet and in other media, and utilize the results of such analysis and comparison in the economic decisions (pricing decisions, portfolio choices, business investment, hiring decisions, and the like) they are soon called to make in their work environment.
Develop a deeper understanding of the impact of modern information technologies (e.g. machine learning, social networks) on the economy as well as society as a whole, such that the students will be able to make informed decisions about the use of these technologies in their future work environment. More specifically, students will be able to:
- Use the rational choice framework to gain a better understanding of how individuals make choices and how to model these choices using machine learning.
- Discuss how the increasing importance of data as an input changes the workings of an economy.
- Predict the impact of increasing automation on wages, employment and overall output.
- Assess whether the use of AI in the decision-making process is going to lead to disadvantages for societal subgroups.
- Speculate about the changes future technological innovations will bring for the effectiveness of monetary and fiscal policy.
- Face-to-face lectures
- Online lectures
- Exercises (exercises, database, software etc.)
We plan to teach face-to-face lectures if possible, but are prepared to complement them with (or switch to) online lectures, depending on the situation.
Module I will be based on traditional face-to face lectures: no tutorials will be taught. However, links to recent articles or blog posts on topics discussed in class - with comments aimed at clarifying how each of them is related to the models and concepts introduced during lectures - will be made available, at regular intervals, on the course web page that students can access on the Bboard platform. Students are encouraged to go through the readings on an individual basis, to verify their understanding of the topics discussed in class, and their relevance for interpreting real world economic events.
In addition to the traditional face-to face lectures, four tutorials are scheduled throughout the semester. During each tutorial, the concepts introduced in class are used to answer questions, and solve problems, possibly like those of which the typical written examination consists.
|Continuous assessment||Partial exams||General exam|
With the purpose of measuring the acquisition of the above-mentioned learning outcomes, the assessment process is based on a written examination (100% of the final grade)
The written exam consists of exercises and/or open questions, aimed at assessing students’ ability to:
- Apply the analytical tools illustrated during the course.
- Solve economic models and explain their implications.
- Identify the economic effects of monetary and fiscal policies.
- Describe the interactions between financial markets developments and changes in economic equilibria.
The exam also consists of short statements (true or false) to discuss, aimed at assessing students’ ability to:
- Precisely define the main economic variables and concepts.
- Articulate economic reasoning.
- Correctly apply the knowledge and skills acquired during the course.
Students can take a partial written exam that covers Module I and complete the written exam at the end of the course, covering Module II. In this case the weight is: 50% for the partial exam (Module I) and 50% for the end of term exam (Module II). Alternatively, students can take a final written exam, on both Modules, that accounts for 100% of the final grade.
For non attending students assessment is based on the written exam (either two partial exams or one final written exam with the same content and weight distribution of those applied to attending students).
- The CORE Team, “The Economy: Economics for a Changing World,” 2017 (free ebook, updated online), Oxford Univ. Press, ISBN: 9780198810247.
- Iovino and M. Maffezzoli, “Lecture notes: Money in modern economies,” 2022, manuscript.
- M. Maffezzoli, “Lecture Notes: The economics of sovereign debt,” 2022, manuscript.
- More materials might be announced at the start of the course.
- The CORE Team, “The Economy: Economics for a Changing World,” 2017, Oxford Univ. Press, ISBN: 9780198810247.
- Mankiw and Taylor, "Economics", Cengage Learning EMEA, 2017.
- More materials might be announced at the start of the course.