European Economy Seminar
Code
1104
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
-Microeconomics
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
The course does not follow one single book. The books by Mankiw (Macroeconomics, Worth Publishers) and Blanchard (Macroeconomics, Prentice Hall) are important to consolidate macroeconomic models and concepts. In addition, the book The Portuguese economy in the context of economic !nancial and monetary integration", edited by the Economics and Research Department of Banco de Portugal provides illustrations of tools for applied economic policy analysis. Furthermore, speci!c papers will be signaled along the course.
Teaching method
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 twoshort 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;
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.