Macroeconomic Policy

Code:

2ECON01

Acronym:

PMACR

Keywords
Classification	Keyword
CNAEF	Economics

Instance: 2016/2017 - 1S

Active?	Yes
Responsible unit:	Agrupamento Científico de Economia
Course/CS Responsible:	Master in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	104	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

Português/English (horários/schedules ME1 e ME2, Português; ME3 English)

Objectives

Macroeconomic Policy is a course in applied economic analysis, aiming at understanding current public debates on monetary and fiscal policies as well as on some structural policies. By combining theoretical elements with the analysis of specific cases, the course covers mainly short term macroeconomic policies - the instruments and the effects of monetary and fiscal policies -, but also includes the long term analysis of structural policies. Particular emphasis is given to the Euro Area and to the recent economic crisis.

Learning outcomes and competences

At the end of the semester students should be able to analyze and discuss the design and implementation of different macroeconomic policy alternatives and their effects on key macroeconomic variables.

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

Basic macroeconomic models in the line of IS/LM and AS/AD.

Program

1. Introduction

1.1. Positive, normative and political economics

1.2. Role and functions of economic policymaking

1.3. Objectives, instruments and institutions of economic policy

1.4. Limits to economic policymaking

2. Fiscal policy

2.1. Main concepts

2.2. Automatic stabilizers

2.3. Discretionary fiscal policy

2.4. Public debt dynamics, fiscal consolidation and fiscal policy rules

2.5. Fiscal policy in interdependent economies

2.6. Current fiscal policy frameworks, in general and, in particular, in the European Union

3. Monetary policy

3.1. Monetary policy instruments and transmission mechanisms

3.2. Inflation as a monetary policy objective

3.3. The time inconsistency and monetary policy rules

3.4. Monetary policy in interdependent economies

3.5. Current monetary policy practice, in general and, in particular, in the Euro Area


4. Supply-side policies and macro-prudential policies

4.1. Structural policies and supply shocks: labor and product markets

4.2. Macro-prudential policy

4.3. Global macroeconomic imbalances and the great recession

4.4. Reforms and macroeconomic policy institutions in the Euro Area

Mandatory literature

Carlin, Wendy e Soskice, David ; Macroeconomics: Imperfections, Institutions and Policies, Oxford University Press, 2006
ECB; The Monetary Policy of the ECB, 2011
Loureiro, João; Política Orçamental na Área Euro, Vida Económica, 2008
Artigos científicos para apresentação e discussão por grupos de estudantes nas aulas; outros artigos a recomendar no decorrer das aulas

Complementary Bibliography

Peter Sorensen e Hans Whitta-Jacobsen; Introducing Advanced Macroeconomics: Growth & Business Cycles, 2ª ed., McGraw-Hill, 2011
Agnès Bénassy-Quéré, Benoit Coeuré, Pierre Jacquet e Jean Pisani-Ferry; Economic Policy: Theory and Practice, Oxford University Press, 2010
Burda, Michael e Wyplosz, Charles; Macroeconomics - a European Text, 6ª ed., Oxford University Press, 2012
Gordon, Robert; Macroeconomics, 11ª ed., Pearson-Addison Wesley, 2009

Teaching methods and learning activities

The classes mix theory, exercises and case-studies, with the presentation of concepts, theories and models being followed by examples of their application to real macroeconomic policy cases.

In each chapter 2, 3 and 4 there is a session in which scientific papers are presented and discussed by the students (to whom the papers will be previously allocated). At the end of each of these sessions all the students write a brief report summarizing the discussion.

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Exame	50,00
Participação presencial	10,00
Trabalho escrito	40,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Apresentação/discussão de um trabalho científico	1,50
Elaboração de relatório/dissertação/tese	8,00
Estudo autónomo	114,00
Frequência das aulas	39,00
Trabalho de investigação	40,00
Total:	202,50

Eligibility for exams

In order to take the distributed evaluation, students must be registered in a class schedule and be present and participate (i.e., write the respective summary reports) in at least three of the four sessions of presentation and discussion of scientific papers.

Calculation formula of final grade

A. Distributed evaluation: (i) two essays (20% each); (ii) class participation (10%); and (iii) final test (50%)

(i) written essay 1, individually or by groups of two students, consisting of the analysis and presentation in class of a scientific paper; the paper will be assigned two weeks in advance;

written essay 2, consisting of the discussion (and presentation in class) of the scientific paper presented by another student or group.

ii) Class participation – there are 4 sessions where scientific papers are presented and discussed by the students. At the end of each of these sessions (last 30 min.) all the students must write a brief (two pages) report summarizing the presentations and discussion. One of these reports per student will be randomly selected for grading.

(iii) The final test covers all the chapters, excluding the specific material covered by the students’ essays (sections 2.6, 3.6, 4.3 and 4.4 of the program). It will coincide with the final exams dates.

In order to pass, an (weighted) average of 9.5 and a minimum of 7.5 in the final test are required

B. Final Exam: Exam (100%).

Classification improvement

The students may try to improve their grade either by applying to the retake exam or to a retake final test (in the case of distributed evaluation).

Observations

horários/shdules ME1 e ME2, Português; ME3 English