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Course 2003-2004 a.y.


Department of Economics

Go to class group/s: 17

Course Head:

Classes: 17

Introduction to the course:

The fundamental goals of the course are to provide an integrated view of Macroeconomics and to equip the student with tools that allow him/her to understand and analyse past and current macroeconomic events. To this end, the course focuses on the functioning of the macroeconomy in both a closed and open-economy setting. The course will start from a static setting and extend to a dynamic view of the economy that sheds light on the workings of the real and the monetary sides of the economy.

Course Content :

PART I: From National Accounts to Macroeconomic Equilibrium

  • What are GDP, GNP and national income? 
  • Static theories determining Consumption, Investment etc   
        - Equilibrium in the Solow model 
        - Short-run equilibrium in the Keynesian model (IS-LM)  
        - Medium-run equilibrium in the Keynesian model (AS-AD) and policy 
  • Introducing a labour market
        - Long-run equilibrium

PART II: Flaws of a static model: going dynamic

  •  The Fischer Model of a simple economy
        - Ricardian Equivalence and policy implications 
  •  Introducing several generations (OLG)
  •  Infinite horizons (the Ramsey model)

PART III: Monetary Economics and Central Banking

  • The role of money in the IS-LM model and the "neoclassical revolution" 
  • Expectations: the basic tools 
  • The real effects of monetary surprises: the Lucas' model 
  • The inflationary bias: the Barro-Gordon model
  • Expectations, output and optimal monetary policy

PART IV: The Open Economy

  • The balance of payments and aggregate demand
  • The goods market in an open economy 
  • Openness in goods and financial markets
  • Output, the interest rate and the exchange rate
  • The Mundell - Fleming model


Selected chapters from:

  • O. BLANCHARD, Macroeconomics, Prentice-Hall, 2000.
  • P. WEIL, Macroeconomic Theory: A Primer, MIT Press, forthcoming.
  • P.R. KRUGMAN, M. OBSTFELD, International Economics (Theory and Policy), Addison-Wesley, 1997.

For further and continuously updated information consult the IEP web site or contact S.I.D. - Servizio Informazioni Didattica - Via Gobbi, 5 - 3rd floor.  


The exam will be in written form.  Students may take the exam in two written parts: a mid-term and a final exam, or they may take one general exam.