Macroeconomic Policy

Code:

2ECON01

Acronym:

PMACR

Keywords
Classification	Keyword
CNAEF	Economics

Instance: 2018/2019 - 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	82	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

Portuguese and 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 issues on the financial system. 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 . Particular emphasis is given to the Euro Area and to macroeconomic policy in the aftermath of 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 Fiscal policy's role in stabilization: automatic stabilizers and discretionary fiscal policy

2.2 Public debt dynamics and fiscal consolidation

2.3 Ricardian Equivalence and fiscal policy effectiveness

2.4 Deficit bias and fiscal policy rules

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

 

3. Monetary policy

3.1 Central banks and monetary policy

3.2 The 3-equiation model: IS, Phillips Curve and monetary policy rule

3.3 Monetary policy and inflation

3.4 Central bank preferences and Taylor rules

3.5 Monetary policy practice, in general and, in particular, in the Euro Area

 

4. Monetary policy, crises and the financial sector

4.1 The financial sector and crises

4.2 Monetary policy in the global financial crisis 

4.3 Post-crisis reform of financial regulation and macro-prudential policies

4.4 The great recession, the financial sector and the economic policy, in general and, in particular, in the Euro Area

Mandatory literature

Wendy Carlin & David Soskice; Macroeconomics: Institutions, Instability, and the Financial System, Oxford University Press, 2015
Artigos científicos para apresentação e discussão por grupos de estudantes nas aulas; outros artigos a recomendar no decorrer das aulas
Scientific papers for presentation and discussion by groups of students in classes; other papers to be recommended during classes

Complementary Bibliography

Agnès Bénassy-Quéré, Benoit Coeuré, Pierre Jacquet & Jean Pisani-Ferry; Economic Policy: Theory and Practice, Oxford University Press, 2010
Peter Sorensen & Hans Whitta-Jacobsen; Introducing Advanced Macroeconomics: Growth & Business Cycles, 2nd ed., McGraw-Hill, 2011
European Central Bank; The Monetary Policy of the ECB, 2011
João Loureiro; Política Orçamental na Área Euro, Vida Económica, 2008
Michael Burda & Charles Wyplosz; Macroeconomics - a European text, 7th ed., Oxford University Press, 2017
Robert Gordon; Macroeconomics, 12th ed., Pearson-Addison Wesley, 2013

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

All students enrolled in the course can take the final exam.

Calculation formula of final grade

A. Distributed evaluation:

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

Components: (i) two essays (20% each); (ii) class participation (10%); and (iii) final test (50%)

(i) Essays will be performed by groups of three students (indicatively), consisting of:

written essay 1 - the analysis and presentation in class of a scientific paper; the paper will be assigned two weeks in advance;

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

ii) Class participation – there are 3 sessions where scientific papers are presented and discussed by the students. After each of these sessions, in which four scientific papers will be presented and discussed, all the students must write a brief (two pages) report summarizing the presentation and discussion of two of the papers. One of these reports per student will be randomly selected for grading. These sessions will take place on: i) October, 23; ii) November, 20; and iii) December, 11.

(iii) The final test covers all the chapters, excluding the specific material covered by the students’ essays (sections 2.5, 3.5 and 4.4 of the program). It will coincide with the final exams dates: January, 11 and January, 30 (retake).

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%). Dates: January, 11 and January, 30 (retake).

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/schedules ME1 e ME2, Português; ME3 English