Updated A.Y. 2021-2022
University of Rome "Tor Vergata"
Faculty of Economics
B.Sc. in Business Administration and Economics
Academic Year 2021-2022
Prof. Alessandro Piergallini
Office Hours: by appointment
Summary and learning objectives
The purpose of this course is to examine the fundamental elements of macroeconomic theory. The study of the main theoretical models is combined with the analysis of data and empirical regularities. At the end of the course, the students will be able to investigate the interactions between macroeconomic variables, analyze the effects of fiscal and monetary policies, evaluate theories from the empirical evidence, and use both theory and evidence to derive the corrective actions for economic and financial crises.
1) Introduction to Macroeconomics: stylized facts
2) Macroeconomic modelling: agents and markets
3) Macroeconomic equilibria
4) The income-expenditure model
5) The IS-LM model
6) Open economies and Mundell-Fleming models
7) The AD-AS model with perfect and imperfect competition
8) The Phillips curve and inflation dynamics
9) Neoclassical macroeconomics
10) The pure neoclassical model and real business cycles
11) The Monetarist model and the expectations-augmented Phillips curve
12) The New Classical Macroeconomics model and the Lucas critique
13) New Keynesian macroeconomics
14) Discretion, commitment and optimal monetary policy
15) Recent developments of macroeconomic theory and policy
The central learning resources to prepare the final exam are given by the Lecture Notes and the Problem Sets available in the section "Teaching material".
Standard Macroeconomics books employing analytical frameworks that are comparable to those adopted in our course are:
- A. Abel, B. Bernanke and D. Croushore, Macroeconomics, Pearson, 2020.
- O. J. Blanchard, Macroeconomics, Pearson, 2017.
- R. Dornbusch, S. Fischer and R. Startz, Macroeconomics, McGraw-Hill, 2018.
- R. T. Froyen, Macroeconomics: Theories and Policies, Pearson, 2013.
- R. J. Gordon, Macroeconomics, Pearson, 2012.
- S. D. D. Williamson, Macroeconomics, Pearson, 2018.
The exam is made up of two parts: a written exam and an oral exam, which will be held on two different days.
- Written exam) You are given six questions - four theoretical questions and two numerical exercises - to answer. The examination must be completed in two hours. I wish to see evidence of your ability to understand theoretical principles and of your ability to learn their application. To prepare the written exam, you are strongly advised to solve the Problem Sets. Suggestions and short answers to solve them are provided in the section "Teaching material". Specimen examination papers showing you the type of the written exam are available in the same section.
- Oral exam) You may be asked to discuss your written answers and to focus on some specific theoretical issues.
Non compulsory Lecture Notes: 46, 49, 73, 92, 93, 140.