Rome, Italy - Course Descriptions - Economic Policy

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Objectives

The module of Economic Policy deals extensively with all the measures taken by parliament, government, central bank and a number of national and local public institutions to orient and influence the economic activity of the entire nation. It explains the "why" and "how" of government action in the economic sphere and what are the objectives of such action. Students will be able to understand what will be the economic policy context within which they will be expected to work and the extent to which it will affect their personal welfare.

Syllabus

• The meaning of economic policy within a macroeconomic frame
• A preliminary classification of policies (full employment, labour, social, industrial, transport, price, commercial, international trade, budgetary and monetary)
• How different policies interact for the achievement of specific economic policy goals
• Different fields of economic activity related to a range of economic policies
• The concept of public interest
• Principles of welfare economics and the way governments introduce welfare objectives into various economic policies
• Principles of monetary policy
• Major instruments of monetary policy
• The role of monetary policy for the control of inflation
• Trade-off between inflation and unemployment. The Phillips curve. IS/LM curves.
• The effects of inflation on different types of incomes
• Incomes policy. The growth of monetary and real wages and the changes in purchasing power.
• Budgetary and fiscal policy, The need for co-ordinating different policy actions to obtain a better performance of the economy
• The relationships with the rest of the world. The need for guiding principles of an international trade policy.
• The evolution of the international monetary system (gold standard and gold exchange standard)
• The role of the International Monetary Fund for the stability of international trade and financial markets.
• The role of central banks and of the recently created European Central Bank in Frankfurt

Recommended Text(s)

R. Dornbusch & S. Fisher, Macroeconomics,
Joseph E. Stiglitz, Globalization and its discontents, Allen Lane, The Penguin Press, 2002

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