Advanced Microeconomics and Macroeconomics
A.Y. 2023/2024
Learning objectives
Module Advanced Microeconomics
This course has essentially two objectives: (i) to provide students with the tools necessary to tackle economic problems in a systematic way, and (ii) to develop basic intuitions that can help students to analyze economic puzzles and policy problems they will encounter during the rest of their career. We will develop a theoretical model of both consumer and producer behavior. Combining both groups within a market and across markets provides a framework that is the basis for virtually all economic analysis. To motivate the concepts and to illustrate the usefulness of the tools, we will cover applications as time permits.
Module Advanced Macroeconomcis:
The course is an introduction to the analysis of the modern models for Dynamic Macroeconomics. It applies relevant formal economic reasoning and advanced optimization techniques to study such macroeconomic topics as: (1) Investment Decisions; (2) Growth Theory. As for Economic Growth, after a broad description of the main "facts" about the process of long-run per-capita income growth, the course will analyze such topics as the relationship between: Physical capital accumulation and growth; Human capital investment, health, and growth; Research and development, population, and income growth.
This course has essentially two objectives: (i) to provide students with the tools necessary to tackle economic problems in a systematic way, and (ii) to develop basic intuitions that can help students to analyze economic puzzles and policy problems they will encounter during the rest of their career. We will develop a theoretical model of both consumer and producer behavior. Combining both groups within a market and across markets provides a framework that is the basis for virtually all economic analysis. To motivate the concepts and to illustrate the usefulness of the tools, we will cover applications as time permits.
Module Advanced Macroeconomcis:
The course is an introduction to the analysis of the modern models for Dynamic Macroeconomics. It applies relevant formal economic reasoning and advanced optimization techniques to study such macroeconomic topics as: (1) Investment Decisions; (2) Growth Theory. As for Economic Growth, after a broad description of the main "facts" about the process of long-run per-capita income growth, the course will analyze such topics as the relationship between: Physical capital accumulation and growth; Human capital investment, health, and growth; Research and development, population, and income growth.
Expected learning outcomes
Module Advanced Microeconomics:
At the end of the microeconomics module students will be able to:1) understand the theory of consumption; 2) work with basic production theory; 3) distinguish the characteristics of markets in perfect competition, monopoly and oligopoly.
Module Advanced Macroeconomics:
At the end of the course students will be able to: (1) Approach autonomously the reading of modern models in the field of dynamic macroeconomics; (2) To obtain the fundamental theoretical results of such models through the application of the related dynamic maximization techniques and (3) To interpret economically the results obtained and their economic policy implications.
At the end of the microeconomics module students will be able to:1) understand the theory of consumption; 2) work with basic production theory; 3) distinguish the characteristics of markets in perfect competition, monopoly and oligopoly.
Module Advanced Macroeconomics:
At the end of the course students will be able to: (1) Approach autonomously the reading of modern models in the field of dynamic macroeconomics; (2) To obtain the fundamental theoretical results of such models through the application of the related dynamic maximization techniques and (3) To interpret economically the results obtained and their economic policy implications.
Lesson period: Second trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course can be attended as a single course.
Course syllabus and organization
Single session
Responsible
Lesson period
Second trimester
Teaching goes on regulary and face-to-face, unless otherwise required in the future by the responsible authotities.
Prerequisites for admission
Before taking the Advanced Microeconomics and Macroeconomics course students are warmly invited to take a basic course in Mathematics. Deep knowledge of such concepts as those of function in one or several variable(s), derivative of a function, logarithmic and exponential functions, does represent a minimal requirement before approaching this course.
Assessment methods and Criteria
For all students the exam is written. The aim of the written exam is to make sure that students have fully understood the basic concepts discussed during the whole course and are able to properly apply them in describing real (microeconomic and macroeconomic) phenomena.
The written exam is composed of a mix of theoretical and numerical exercises.
Every exercise may, in turn, be composed of different questions.
The written exam is composed of a mix of theoretical and numerical exercises.
Every exercise may, in turn, be composed of different questions.
Module Advanced Microeconomics
Course syllabus
1. Consumer Theory
1.1 Budget Constraint
1.2 Preferences and Utility
1.3 Utility Maximization
1.4 Substitution and Income Effect
1.5 Choice under uncertainty and insurance
2. Theory of the Firm
2.1 Technology
2.2 Cost minimization
2.3 Cost curves
2.4 Profit Maximization
2.5 Firm supply
2.6 Industry Supply
3. Partial Equilibrium
3.1 Market Demand and supply
3.2 Equilibrium
4: Choice under risk
4.1 Risk and risk aversion
4.2 Expected Utility Theory
5. Game Theory
5.1 Games and Strategies in normal and extensive form
5.2 Nash Equilibria and Subgame Perfect Equilibria
5.3 Trigger Strategies in Repeated Games
6. Adverse selection and moral hazard
1.1 Budget Constraint
1.2 Preferences and Utility
1.3 Utility Maximization
1.4 Substitution and Income Effect
1.5 Choice under uncertainty and insurance
2. Theory of the Firm
2.1 Technology
2.2 Cost minimization
2.3 Cost curves
2.4 Profit Maximization
2.5 Firm supply
2.6 Industry Supply
3. Partial Equilibrium
3.1 Market Demand and supply
3.2 Equilibrium
4: Choice under risk
4.1 Risk and risk aversion
4.2 Expected Utility Theory
5. Game Theory
5.1 Games and Strategies in normal and extensive form
5.2 Nash Equilibria and Subgame Perfect Equilibria
5.3 Trigger Strategies in Repeated Games
6. Adverse selection and moral hazard
Teaching methods
The course is composed of theoretical as well as practical classes. The aim of the practical classes is to show students how they can concretely (e.g., in view of the resolution of numerical exercises) use the theory learnt during the theoretical section of the course.
Teaching Resources
EXT-BOOKS and material
Walter Nicholson and Christopher Snyder: Microeconomic Theory: Basic Principles and Extensions. 10th edition
McAfee Preston, Tracy R. Lewis, and Donald .J. Dale: Introduction to Microeconomic Analysis, v2.1; Downlodable for free at https://www.kellogg.northwestern.edu/faculty/dale/ieav21.pdf
H. Varian: "Intermediate Microeconomics: A modern approach", 9th Edition (Last
Edition)
Walter Nicholson and Christopher Snyder: Microeconomic Theory: Basic Principles and Extensions. 10th edition
McAfee Preston, Tracy R. Lewis, and Donald .J. Dale: Introduction to Microeconomic Analysis, v2.1; Downlodable for free at https://www.kellogg.northwestern.edu/faculty/dale/ieav21.pdf
H. Varian: "Intermediate Microeconomics: A modern approach", 9th Edition (Last
Edition)
Module Advanced Macroeconomics
Course syllabus
First part: Output fluctuations and inflation
1. Production, unemployment and inflation. Mishkin, Ch. 1, 2.
2. Output and inflation in the long run. Mishkin, Ch. 3, 5.
3. Financial markets, monetary policy and output fluctuations. Mishkin, Ch. 5, 8, 9, 10, 17.
4. The Aggregate-Demand Aggregate-Supply model. Mishkin, Ch. 10, 11, 12.
5. The role of fiscal and monetary policy. Mishkin, Ch. 13.
Second part: International financial integration and crises
6. Financial integration; The Balance of Payments. Mishkin, Ch. 4, SUW Ch. 1
7. Saving, Investment, the current account and debt sustainability. Mishkin, Ch. 4. SUW Ch. 2, 3, 4.
8. Global imbalances, external adjustment and Sudden Stops. SUW Ch. 1, 7, 9.
9. Exchange rate determination in the short and the long run. Mishkin, Ch. 17. SUW Ch. 8, 9, 10.
10. Sovereign debt crises and currency crises. SUW ch 15.
1. Production, unemployment and inflation. Mishkin, Ch. 1, 2.
2. Output and inflation in the long run. Mishkin, Ch. 3, 5.
3. Financial markets, monetary policy and output fluctuations. Mishkin, Ch. 5, 8, 9, 10, 17.
4. The Aggregate-Demand Aggregate-Supply model. Mishkin, Ch. 10, 11, 12.
5. The role of fiscal and monetary policy. Mishkin, Ch. 13.
Second part: International financial integration and crises
6. Financial integration; The Balance of Payments. Mishkin, Ch. 4, SUW Ch. 1
7. Saving, Investment, the current account and debt sustainability. Mishkin, Ch. 4. SUW Ch. 2, 3, 4.
8. Global imbalances, external adjustment and Sudden Stops. SUW Ch. 1, 7, 9.
9. Exchange rate determination in the short and the long run. Mishkin, Ch. 17. SUW Ch. 8, 9, 10.
10. Sovereign debt crises and currency crises. SUW ch 15.
Teaching methods
The course is composed of theoretical as well as practical classes. The aim of the practical classes is to show students how they can concretely (e.g., in view of the resolution of numerical exercises) use the theory learnt during the theoretical section of the course.
Teaching Resources
Mishkin. Macroeconomics policy and practice. Pearson (2015)
Smitt-Grohe and Uribe (SUW). Open economy macroeconomics. Princeton university press 2017. Open access. http://www.columbia.edu/~mu2166/book/
Smitt-Grohe and Uribe (SUW). Open economy macroeconomics. Princeton university press 2017. Open access. http://www.columbia.edu/~mu2166/book/
Module Advanced Macroeconomics
SECS-P/01 - ECONOMICS - University credits: 6
Lessons: 40 hours
Professor:
Leonardi Marco
Module Advanced Microeconomics
SECS-P/01 - ECONOMICS - University credits: 6
Lessons: 40 hours
Professor:
Garella Paolo
Educational website(s)
Professor(s)