Nova School of Business and Economics

Seminário de Economia Europeia

Code

1104-220

Academic unit

null

Department

null

Credits

7,5

Teacher in charge

João Salgueiro

Teaching language

English

Objectives

The objective of the course is to consolidate and enlarge macroeconomic concepts and models acquired
by students in previous macro courses and illustrate their use for applied economic policy analysis and
decision making. At the end of the course students should have a coherent conceptual framework to
analyze current macroeconomic developments and discuss policy issues. In addition, the course makes
reference to some theoretical extensions, signaling more advanced macro topics. The course has
three main building blocks. Firstly, the determinants of long term economic growth and
uctuations are examined. Secondly, the macroeconomic models are revised and enlarged to include dynamic
components and highlight the role of expectations and external linkages. Thirdly, the course discusses
applied economic policy issues and current developments.

Prerequisites

Macroeconomics

Subject matter

2 Course outline
Economic Growth and Fluctuations
Production function and the sources of growth
Solow growth model
Growth accounting
Potential output and the NAIRU
Economic
uctuations
Optimality of macroeconomic policies
Macroeconomic Models
The IS-LM model (consolidation)
Credit cycles
The Mundell-Fleming model
Static aggregate demand and supply
Labour market and expectations
Dynamic aggregate demand and supply
The new neoclassical synthesis
1
Economic Policy Analysis
Monetary policy in practice
Money market interventions
Monetary policy transmission mechanism
The European Central Bank and the Federal Reserve
Fiscal policy in practice
Budgetary process
Cyclically adjusted primary general government balances
Public debt dynamics
Stability and growth pact
Structural policies
Product market regulation
Labour market regulation

Bibliography

null

Teaching method

null

Evaluation method

The evaluation is composed of three blocks:

1. Practical evaluation 20%; 2. team assignments 20% and 3. Final exam 60%. The practical evaluation consists of two
short quizzes to answer in class, including a multiple choice component. The team
assignments comprise two reports to be delivered in specified dates: a) A monetary
policy briefing note and b) A Fiscal policy assessment note. The monetary policy
note should describe overall macroeconomic conditions, the conceptual framework of
monetary policy and suggest an orientation for the interest rate in the euro area.
The Fiscal policy assessment should analyse budget developments in one or two EU
countries and suggest specific orientations for Fiscal policy. Groups should have four
students (minimun of three and maximum of five). The Final exam includes all topics
covered in class and a minimum grade of 9 is required for passing.

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