INTERNATIONAL ECONOMIC AND FINANCIAL POLICYAnno accademico 2016/2017 - 1° anno
SSD: SECS-P/02 - Politica Economica
Organizzazione didattica: 225 ore d'impegno totale, 165 di studio individuale, 60 di lezione frontale
1.Knowledge and understanding
The course aims to provide conceptual tools for the macroeocnomic analysis of the global economic environment. The role of economic policy, in the current context of financial globalization will be studied by devoting a particular attention to understand different theoretical approaches to policy making. Thus, the emphasis will be focused in describing, from a macroeconomic point of view, the interaction between the real and financial side of economies, by focusing on expectations, markets and the determination of the equilibrium level of income. A specific reference to Monetary Unions will be done. After a general revision of the basic macroeconomic knowledge, the course will also provide a specific insight on the beneficial role that many conceptual tools imported from statistical physics may assume in studying macroeconomic problems. The econophysics approach, addressed both to financial markets and the real side of an economy in general, will be shown to provide more focused models for an effective design of policies.
2. Applying knowledge and understanding
Applying knowledge and understanding: Students are required to broaden both their culture and their terminology. They should develop proRactive analysis capabilities, in order to use theoretical models and verify their applicability to real cases. The degree of their ability will be monitored during the course, also by interpreting relevant facts of the critical global macroeconomic environment.
3. Making judgments
It is particularly important that students develop their own critical skills and independent judgment capacity. Macroeconomic Policy is a matter of ideology, after all, and (therefore) an individual well- sounded personality should be used for the analysis of actual cases. These cultural advancements are required in order to develop the attitude to identify policy objectives, policy instruments and their applicability range, both within a domestic scenario and in a supra-national setting.
4. Communication skills
During the course, the student will have the opportunity to improve and refine the technical language and the attitude for economic reasoning (whose fundamentals should have been already learnt in previous economics courses) and to broaden their capability to express themselves in English. Communicative skills in the foreign language will not be tested, but it is obvious that the ability to reply to questions and discuss issues is “reasonably” necessary. Moreover, an adequate knowledge of basics of Macroeconomics and of Mathematics for Economics is needed.
5. Learning skills
The learning ability of the student will be checked by the teacher during the course, by encouraging participation and providing guidance for the most correct learning process. In this discipline, more than in others, analytical theoretical models should be carefully understood before they can be profitably referred to specific historical and institutional contexts.
Mathematics, Microeconomics, Macroeconomics, Economic Policy.
Mandatory. Students are firmly suggested to attend lectures.
Contenuti del corso
Part I: National Accounts*, The Goods Market*, The Financial Market*, The IS-LM-BP Model and the International Economic Policy*, The Phillips Curve*, The Expectations Theories*, The AD-AS Model, the Equilibrium of the Economy and the Full Employment*, A Keynesian Model for Macroeconomic Equilibrium*, Inflation and Sovereign Debt*, The overshooting of the exchange rate*, Introduction to DSGE Macroeconomic models*, Econometric Policy Evaluation, Optimal Currency Areas*.
Part II: Introduction to Econophysics, The Efficient Market Hypothesis*, Random walk*, Lévy stochastic processes and limit theorems*, Scales in financial data*, Stationarity and time correlation*, Time correlation in financial time series*, Stochastic models of price dynamics*, Scaling and its breakdown*, Arch and Garch processes*, Econophysics Review I: Empirical Facts*.
Part III: Econophysics Review II: Agent-Based Models*, Behavioral Macroeconomics and Macroeconomic Behavior*, Alternative Paradigms for Economic Policy*, Agent-based Macro*, Towards a not too rational macroeconomics*, The representative agent framework: limits and critique*.
A star, *, indicates the topics without which the exam cannot be passed
Testi di riferimento
- Handouts on International Macroeconomic Policy (see below); - Scientific Articles on Macroeconomics, (see below).
- Mantegna R.N. – Stanley H.E., An Introduction to Econophysics. Cambridge University Press, 2000, chapters 1-10.
- Scientific Articles on statistical properties of Financial Markets, (see below).
- Scientific Articles on Agent-Based Models for Macroeconomic Analysis, (see below).
Programmazione del corso
|1||*||Introduction and National Accounting||Handouts : n.0-Intro-and-Bibliography and n.1-Introduction-National-Accounting|
|2||*||The Goods Market||Handouts : n.2-The-Goods-Market|
|3||*||The Financial Market||Handouts : n.3-The-Financial-Market|
|4||*||International Economic Policy: IS-LM-BP||Handouts : n.4-The-IS-LM-Model|
|5||*||The Phillips Curve||Handouts : n.5- Phillips-Curve-and-Expectations|
|6||*||The Expectations Theories||Articles: see Bibliography (Handout n.0) for details|
|7||*||The Macroeconomic Equilibrium: AD-AS||Handouts : n.6-AD-AS|
|8||*||A Keynesian Model||Handouts : n.7-A-Keynesian-Framework|
|9||*||The Macroeconomic Equilibrium: AD-AS-revised||Handouts : n.8-AD-AS-revised|
|10||*||Inflation and Sovereign Debt Dynamics||Handouts : n.9- Inflation- n.10-Sovereign-Debt|
|11||*||Introduction to DSGE Models||Articles: see Bibliography (Handout n.0) for details|
|12||*||Econometric Policy Evaluation||Articles: see Bibliography (Handout n.0) for details|
|13||*||Optimal Currency Areas||Articles: see Bibliography (Handout n.0) for details|
|14||*||Efficient Market Hypothesis||Mantegna–Stanley, chapter: 1, 2|
|15||*||Statistic distributions for financial markets||Mantegna–Stanley, chapter: 3, 4|
|16||*||Statistical properties of financial markets data||Mantegna–Stanley, chapter: 5, 6|
|17||*||Time correlation of financial data||Mantegna–Stanley, chapter: 7, 8|
|18||*||Scaling and its breakdown; Arch and Garch||Mantegna–Stanley, chapter: 9, 10|
|19||Arch and Garch||Articles: see Bibliography (Handout n.0) for details|
|20||*||Empirical Facts of Financial Markets||Articles: see Bibliography (Handout n.0) for details|
|21||*||Agent-based Modeling for Macroeconomics||Articles: see Bibliography (Handout n.0) for details|
|22||*||Behavioral Macroeconomics||Articles: see Bibliography (Handout n.0) for details|
|23||*||Agent-based models of financial markets||Articles: see Bibliography (Handout n.0) for details|
|24||*||Alternative Paradigms of Economic Policy||Articles: see Bibliography (Handout n.0) for details|
|25||The Representative Agent: limits and critique||Articles: see Bibliography (Handout n.0) for details|
N.B. La conoscenza degli argomenti contrassegnati con l'asterisco è condizione necessaria ma non sufficiente per il superamento dell'esame. Rispondere in maniera sufficiente o anche più che sufficiente alle domande su tali argomenti non assicura, pertanto, il superamento dell'esame.
Modalità di verifica dell'apprendimento
Regular exam consists of a preliminary written test followed, in case of success, by the oral test.
Esempi di domande e/o esercizi frequenti
1. Describe new policy approaches to dampen financial fluctuations: can you report which advantages they have with respect to mainstream theories?
2. Which role is played by the topology for the spreading of imitation among traders in financial markets? Does it affect the applicability of stabilization policies?
3. Do you think instruments exist in order to anticipate financial crises? Give your detailed opinion about the Basle Regulations for banking activities.
4. Describe the Rational Expectation Model and the Efficient Market Hypothesis and discuss their forecasting capacity for macroeconomic variables. Do you think that predictability exists in macroeconomics?