Principles of Economics F - O

Academic Year 2023/2024 - Teacher: Massimo ARNONE

Expected Learning Outcomes

The course aims to offer students tools for understanding economic reality. That reality is made up of directly observable facts and others that are less easy to observe. Economic science serves to explain those facts so that they can be predicted and, possibly, modified. Economic facts are all those that imply the use of material and immaterial resources. That use is the result of individual choices or sums of individual choices. Economics has the task of understanding those choices and their implications, both individual and collective. To this end, abstract hypotheses and empirical observation are combined, respecting the scientific method. It is assumed that the choices respond to a criterion (one of these is the optimization principle) and it is also assumed that there is a state of the economic system in which the choices are compatible with each other (what economists call equilibrium). However, such a representation must be subjected to empirical verification. A theoretical hypothesis cannot be maintained if it is denied by the facts. In that case, it is necessary to search for another theoretical hypothesis and subject it to empirical verification again, until a hypothesis is validated. Empirical verification does not always give reliable results. Errors can be made if a validated data analysis protocol is not followed. The course will lead students to possess a solid body of knowledge but will also put them in a position to be able to abandon that baggage where it proves, at a certain point, to be inadequate to understand the phenomena under examination.

Knowledge and understanding: the student can understand both the microeconomic theories and phenomena related to the functioning of the markets and the guidelines that can inspire economic policy actions. Further care is reserved for the analysis of competitive markets and the methods of regulation of the sectors of economic activity

Ability to apply knowledge and understanding: the student, thanks to the continuous reference to the data that measure the illustrated economic phenomena and through examples taken from everyday life, will acquire the methodological tools that will allow him to apply the basic economic knowledge. Furthermore, the presence of in-depth materials and case studies made available by the teacher and the organization of working groups will give the possibility of creating permanent interaction between class and teacher

Making judgments: the student acquires methodological tools useful for analyzing and interpreting microeconomic phenomena, also at an international level, and can critically evaluate the institutional context.

Communication skills: the student develops and strengthens the communication, processing, and synthesis skills of data relating to the problems being studied, also through the acquisition of specific economic terminology.

Learning skills: the student will be introduced to a higher-level study method, which will allow him to break down complex problems and manage their solutions in specific applications.

Course Structure

Frontal/traditional teaching

Required Prerequisites


Attendance of Lessons


Detailed Course Content

1. Principles of economics (ACEMOGLU ET AL., CHAPTER. 1)

2. The use of economic models (ACEMOGLU ET AL., CHAPTER. 2)

3. Optimization (ACEMOGLU ET AL., CHAPTER. 3)

4. Demand, supply, balance (ACEMOGLU ET AL., CHAPTER. 4)

5. Consumers and incentives (ACEMOGLU ET AL., CHAPTER. 5)

6. Enterprises and incentives (ACEMOGLU ET AL., CHAPTER. 6)

7. Perfect competition and the invisible hand (ACEMOGLU ET AL., CHAPTER. 7)

8. International trade (ACEMOGLU ET AL., CHAPTER. 8)

9. Externalities and public goods (ACEMOGLU ET AL., CHAPTER. 9)

10. The state of the economy (ACEMOGLU ET AL., CHAPTER. 10)

11. Markets for factors of production (ACEMOGLU ET AL., CHAPTER. 11)

12. Monopoly (ACEMOGLU ET AL., CHAPTER. 12)

13. Game theory and strategic play (ACEMOGLU ET AL., CHAPTER. 13)

14. Oligopoly and monopolistic competition (ACEMOGLU ET AL., CHAPTER. 14)

15. Trade-offs involving time and risk (ACEMOGLU ET AL., CHAPTER. 15)

16. The information economy (ACEMOGLU ET AL., CHAPTER. 16)

17. Auctions and Trading (ACEMOGLU ET AL., CHAPTER. 17)

18. Social economy (ACEMOGLU ET AL., CHAPTER. 18)

19. The Wealth of Nations: Macroeconomic Aggregates (ACEMOGLU ET AL., CHAPTER. 19)

20. Aggregate income (ACEMOGLU ET AL., CHAPTER. 20) 

21. Economic growth (ACEMOGLU ET AL., CHAPTER. 21)

22. Why is there unequal development? (ACEMOGLU ET AL., CHAPTER. 22)

23. Employment and Unemployment (ACEMOGLU ET AL., CHAPTER. 23)

24. Credit markets (ACEMOGLU ET AL., CHAPTER. 24)

25. The monetary system (ACEMOGLU ET AL., CHAPTER. 25)

26. Economic fluctuations in the short run (ACEMOGLU ET AL., CHAPTER. 26)

27. The counter-cyclical macroeconomic policy (ACEMOGLU ET AL., CHAPTER. 27)

28. Macroeconomics and international trade (ACEMOGLU ET AL., CHAPTER. 28)

29. Macroeconomics in an open economy (ACEMOGLU ET AL., CHAPTER. 29)

30. From the Income-Expenditure model to the AS-AD model (Appendix)

Textbook Information

ACEMOGLU D., LAIBSON D., LIST JOHN A. (2020), Principi di Economia Politica. Teoria ed Evidenza Empirica, Seconda Edizione, PEARSON Italia

Any supplementary teaching material will be made available by the teacher during the lessons

Course Planning

 SubjectsText References
1principles and practice of economics
2The use of economic models 
4Demand, supply, balance 
5Consumers and incentives 
6Enterprises and incentives 
7Perfect competition and the invisible hand 
8International trade 
9Externalities and public goods 
10The state of the economy 
11Markets for factors of production 
13Game theory and strategic play 
14Oligopoly and monopolistic competition 
15Trade-offs involving time and risk 
16The information economy 
17Auctions and Trading 
18Social economy 
19The Wealth of Nations: Macroeconomic Aggregates 
20Aggregate income 
21Economic growth 
22Why is there unequal development? 
23Employment and Unemployment 
24Credit markets 
25The monetary system 
26Economic fluctuations in the short run 
27The counter-cyclical macroeconomic policy 
28Macroeconomics and international trade 
29From the Income-Expenditure model to the AS-AD model 
30Macroeconomics in an open economy 

Learning Assessment

Learning Assessment Procedures

Separate written and oral exam