Insegnamento a.a. 2023-2024


Department of Economics

Course taught in English
Go to class group/s: 31
CLEAM (6 credits - I sem. - OP  |  SECS-P/04) - CLEF (6 credits - I sem. - OP  |  SECS-P/04) - CLEACC (6 credits - I sem. - OP  |  SECS-P/04) - BESS-CLES (6 credits - I sem. - OP  |  SECS-P/04) - WBB (6 credits - I sem. - OP  |  SECS-P/04) - BIEF (6 credits - I sem. - OP  |  SECS-P/04) - BIEM (6 credits - I sem. - OP  |  SECS-P/04) - BIG (6 credits - I sem. - OP  |  SECS-P/04) - BEMACS (6 credits - I sem. - OP  |  SECS-P/04) - BAI (6 credits - I sem. - OP  |  SECS-P/04)
Course Director:

Classes: 31 (I sem.)

Suggested background knowledge

A solid background in intermediate macroeconomics

Mission & Content Summary


The course mission is to introduce students to a number of economically relevant real-world questions and challenges and try to address them with the help of modern macroeconomic tools, concepts and perspectives. The course's structure is divided into four modules. The first module tackles important aspects of monetary and fiscal policy in the light of the recent macroeconomic events. The second one focuses on inequality, at the national and international level, and on its economic causes. The third one deals with long-run growth, our understanding of its determinants, and the relationship between short-run fluctuations and long-run trends. The last one focuses on the labor market from a macroeconomic perspective, highlighting how labor market outcomes affect, and are affected by, the aggregate economy.


Module I (prof. Perotti):


Part I: Topics in monetary policy

I.1: How money is created. The tools of central banks: Conventional and unconventional monetary policies. Central bank policies to disinflate the economy

I.2: Inflation and the balance sheet of banks and central banks

1.3: The Modern Monetary Theory: what is new, what is different?

I.4: Cryptocurrencies and digital currencies


Part II: Fiscal policy

II.1:   Austerity vs. stimulus: what do we know (if we know something)?

II.2: How do we evaluate the sustainability of fiscal policies?

II.3: The fiscal policy response to the pandemic and the energy crisis in US and Europe: a comparison


Part III: The architecture of Europe

III.1: The architecture of Europe: mutual insurance vs. redistribution, with an application to the Greek crisis. Eurobonds and the NextGenEU

III.2: An era of low interest rates? Safe bonds.



Module II (prof. Nicola Pavoni):

Lesson 1: Global Inequality and its evolution over time

Lessons 2 and 3: Inequality Across Nations

- The neoclassical production function

- Development and growth accounting

Lesson 4: Inequality within nations: Determinants of individual Income and Wealth inequality

Lesson 5:  Introduction to Income and Wealth Taxation: shall we tax the superrich?

Lesson 6: Automation and Artificial Intelligence and their Implications for Inequality: Shall we tax Robots?



Module III (prof. Marco Maffezzoli):

·       Long-run growth (2 lectures)

1. Economic growth in the long run: convergence or divergence?

2. The determinants of long-run growth.

·       Human capital accumulation and technological progress (2 lectures)

1. The role of human capital: some facts.

2. Technological progress: issues and future prospects.

·       Business cycles and long run-growth: unifying the analysis (2 lectures)

1. Empirical evidence on hysteresis.

2. Sources of hysteresis and policy implications.



Module IV (prof. Antonella Trigari):

We discuss issues belonging to the field of macro-labor, with a focus is on the recent Pandemic recession, but also extending to earlier business cycles. We cover selected themes among the following.


Theme I: Flow approach to labor markets and use of micro data

We introduce the “flow approach” to labor markets, the modern approach to unemployment building up from the flows of workers and jobs. We emphasize that its richness captures important implications of labor market mechanisms for macro and allows for a productive use of micro data on labor markets.


Theme II: Labor markets and monetary policy

We take a labor market perspective on inflation and monetary policy. We discuss: i) why Janet Yellen - the Fed chair from 2014 to 2018 - developed the “Yellen’s labor market dashboard”, guiding the Fed toward reaching the goals of maximum employment and price stability; ii) why the 2019 review of the Fed strategy emphasizes that maximum employment is a broad-based and inclusive goal; iii) whether Covid-era inflation can be explained by fiscal and monetary policies (aka demand) operating through the overheating of the labor market; iv) the extent to which inflation is conflict and the notion of wage price spirals.


Theme III: Inequality and monetary policy

We discuss the links between monetary policy and (labor market) inequality and do it around three themes: i) the distributional effects of monetary policy; ii) how inequality changes the transmission channels of monetary policy; iii) optimal monetary policy with inequality.


Theme IV: Pandemic labor markets and fiscal policies

We cover selected features of pandemic labor markets: i) the role of demand vs. supply shocks, sectoral aspects, and labor market reallocation; ii) the Great Resignation; iii) work from home; iv) the alternative approaches of "insuring the worker" (the US approach with temporary layoffs and UI benefits) vs. "insuring" the job (the EA approach with job retention schemes).

Intended Learning Outcomes (ILO)


At the end of the course student will be able to...

Module I:

Explain how money is created and clarify the role of cryptocurrencies and digital currencies.

Understand the relationship between inflation and the balance sheet of banks and central banks.

Illustrate the role of fiscal policy in shaping the architecture of Europe.

Identify the causes and consequences of the current era of low interest rates.

Describe the tools of macroeconomics with an empirical application.

Module II:

Understand income and wealth inequality, the forces generating them, and the extent to which policy intervention can affect them.

The module includes an empirical documentation of the facts and a synthesis of the mechanisms generating them.

Module III:

Present empirical evidence on the long-run growth process and discuss its outcomes.

Suggest some determinants of long-run growth and discuss their relevance, focusing on the role of technology and human capital accumulation.

Clarify the relationships between long-run growth and the business cycle and draw some policy lessons.

Module IV:

Know the building blocks of the flow approach to labor markets and connect it to macro and micro data.

Understand how labor market outcomes affect, and are affected by, the aggregate economy.

Understand the links between labor markets and fiscal and monetary policies.


At the end of the course student will be able to...

Apply the knowledge acquired during the course to understand some relevant contemporary economic issues and evaluate the likely future evolution of our economic environment, in the short and the long run.

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.

·       Assess the impact of labor market policies on the aggregate economy and predict the impact of business cycles on labor market outcomes in the aggregate and in the cross section.

Teaching methods

  • 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.

Assessment methods

  Continuous assessment Partial exams General exam
  • Written individual exam (traditional/online)
  x x


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-II and complete the written exam at the end of the course, covering Module III-IV. In this case the weight is: 50% for the partial exam (Module I-II) and 50% for the end of term exam (Module III-IV). Alternatively, students can take a final written exam, on all 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).


Teaching materials


Module I:

Lecture notes provided before each class



Module II:

·       Lecture Notes

·       Chancel and Piketty: Global Income Inequality, 1820-2020: The Persistence and Mutation of Extreme Inequality (Journal of the European Economic Association, 2021)

·       Weil. Economic Growth, Chapter 1, 7, 13, 14. Addison-Wesley, 2014.

·       Piketty: `Capital in the 21st Century,’ Harvard University Press, 2014.

·       C. Jones: `Pareto and Piketty: The Macroeconomics of Top Income and Wealth Inequality,’ (Journal of Economic Perspectives, 2015)

·       Saez Zucman. `Wealth Taxation: Lessons from History and Recent Developments’, AER Papers and Proceedings, 2022.

·       Scheuer and Slemrod: `Taxing our Wealth’, Journal of Economic Perspectives, 2021.

·       Scheuer: `Taxing the superrich: Challenges of a fair tax system’ UBS Center Public Paper #9

·       Acemoglu and Restepo: `Automation and New Tasks: How Technology Displaces and Reinstates Labor.’ Journal of Economic Perspectives, 2018.

·       Lu and Zhou. A review on the economics of artificial intelligence. The Journal of Economic Surveys, 2021.


Module III (preliminary):

·       Jones (2016): The Facts of Economic Growth, Handbook of Macroeconomics, Vol. 2

·       Tamura et al. (2019): Economic growth in the long run, Journal of Development Economics, 137

·       Johnson and Papageorgiou (2020): What Remains of Cross-Country Convergence? Jounal of Economic Literature, 58(1)

·       Bloom et al. (2020): Are Ideas Getting Harder to Find? American Economic Review, 110(4)

·       Deming (2022): Four Facts about Human Capital, Journal of Economic Perspectives, 36(3)

·       Abraham and Mallatt (2022), Measuring Human Capital, Journal of Economic Perspectives, 36(3)

·       Acemoglu and Johnson (2023): Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity, MIT Press

·       Cerra et al. (2023): Hysteresis and Business Cycles, Journal of Economic Literature, 61(1)

·       Fatás (2019): Fiscal Policy, Potential Output, and the Shifting Goalposts, IMF Economic Re-view, 67


Module IV (preliminary):

·       Lecture slides

·       Articles and papers of different nature: articles from the press; scientific papers; review papers; policy papers.


Last change 01/08/2023 09:03