POLITICAL ECONOMY
Preliminary knowledge in economics is not required. Basic concepts in algebra and geometry commonly taught in the upper secondary school are sufficient to understand the formal aspects of the macroeconomic model and to deal with the simple quantitative and graphic applications proposed.
A synthetic review of these concepts will be offered, if needed, in the first lectures.
The learning assessment will be based on a written and an oral examination.
The written examination is intended as a pre-requisite to be admitted to the oral exam.
The written exam consists of a few open-ended questions aiming at assessing the knowledge of the concepts discussed during the lectures, including the development and functions of the European institutions. Besides, the exam aims at verifying the familiarity with the procedures of the economic analysis: hence, simple applications – both quantitative and graphic – of the macroeconomic model can be required.
The short oral examination will assess the ability of the candidate to argue according to the logic of the economic approach: the candidate will be required to illustrate and explain – as rigorously as possible – the functioning of one of the economic mechanisms presented in the course. Based on the results of the written exam, the oral examination will consist of a discussion of the written exam or of a topic of the course not included in the written test.
The aim of the course is to provide the basic knowledge required to understand the economic dynamics of a system which has trade and financial relations with other economic systems. The course is offered to students who, presumably, will deal with the international aspects of social relationship in their professional activity, and hence is intended to endow them with the following information and knowledge:
a) basic concepts of macroeconomic analysis (national income and product, consumption, investment, public expenditure, international trade and balance of payments, interest and exchange rates);
b) the logic of economic approach, applied – in particular – to the study of the international economic relations;
c) historical evolution and prospects of the European economic institutions, and their role in determining the economic equilibria and promoting economic growth.
To these aims, a formal (simple) Keynesian model of the markets for goods in an open economy will be proposed, and it will be accompanied by elementary quantitative or graphic exercises, aimed at increasing familiarity with the logic of the model and verifying both its internal coherence and descriptive and explanatory limitations.
Moreover, a part of the lectures will be devoted to study the origin and development of the European institutions (European Union, Economic and Monetary Union) and to the analysis of their role in the current economic dynamics.
At the end of the course, the students will be supposed to:
a) have familiarity with the elements and the basic mechanisms of the macroeconomic model discussed in the lectures;
b) be able to explain – using the model – the dynamics of the internal and international economic relations (e.g.: consequences of a variation of the exchange rate on the trade balance and the macroeconomic equilibrium; the role of the economic policies in determining the macroeconomic equilibrium);
c) know the basic steps of the development of the main European economic institutions, and be able to discuss the reasons of their origin and their effective and potential role in favouring the economic stabilization and growth of Europe, properly referring to the economic mechanisms that explain the functions of these institutions.
The course is composed by three parts:
A. The macroeconomic system (15 hours)
a) variables of the macroeconomic system; income and production; the circular flow of income; economic growth; unemployment; inflation.
b) the Keynesian model of the markets for goods: the market functioning; schools of macroeconomic thought: the Say’s law and the effective demand principle.
c) the role of money in the economic system; the central bank; the banking system; interest rates; money demand and supply and equilibrium on the money market.
d) role of the economic policies: fiscal policy; monetary policy.
B. Open economy (10 hours)
a) the Keynesian model in an open economy: export and import. Advantages and disadvantages of international trade. Globalization. International institutions and international trade. Free trade areas.
b) balance of payments and exchange rates: fixed and floating exchange rates; effects of exchange rates on international trade and the macroeconomic equilibrium.
C. European institutions (5 hours)
a) main steps of the European integration; features and functioning of the European socio-economic model.
b) the European Union: origin of the EU; the Maastricht Treaty and the convergence criteria; costs and benefits of the EU single market.
c) the Economic and Monetary Union: the origin of Euro; advantages and disadvantages of a monetary union; features of an optimum currency area.
The course provides 30 hours of lectures. They are divided into:
a) mainly theoretical lectures, which will also be integrated with applications and solution of simple exercises (quantitative or graphic);
b) seminars provided by the teacher or – if possible – by the students, where the origin, the evolution and the economic role of the main European institutions will be discussed. These lectures – intended as an integral part of the course – constitute a first opportunity for self-assessment and for an application of the categories, the mechanisms and the logic of the economic approach presented in the lectures.
Besides the discussion of the mandatory and suggested readings, students will be invited to propose articles, short essays, documents that – due to their connection with the contents and methods of the course – can be usefully presented to the class. Synergies with the contents of other courses will be encouraged.
The main moments devoted to consultation of the teacher about the lectures’ topics are before and after the lecture themselves.
Further moments of consultation can be established by e-mail appointment.
With the aim of enhancing the collaboration among the students, collective moments of consultation will be encouraged, in particular for questions related to the quantitative exercises and in the period immediately before the final exam.