The course is an introduction to modern macroeconomics analysis based on first principles: planning optima, utility maximization, asset pricing and competitive equilibrium theory. The first part of the course focuses on dynamic efficiency and optimal growth with capital accumulation (the Ramsey Problem). The second part on optimal consumption, savings and asset accumulation from the individual point of view. We introduce the notions of inter-temporal budget constraints, Euler equations, consumption smoothing over time and states, risk aversion, precautionary saving and asset pricing.
Office: Room 524, LUISS, Viale Romania 32
Office Hours: Tuesday, 15:00-17:00
Lectures: Oct. 13, 9:00-11:30 - Oct. 15, 14:30-17:00 - Oct. 20, 16:00-18:30 - Oct. 22, 14:30-17:00 - Oct. 27, 16:00-18:30 - Oct 28, 14:30-17:00
The course provides a basic understanding of the architecture of the European Institutions presiding over monetary policies. The objective of the course is acquiring a broad knowledge of the evolvement, characteristics and motivations of the main institutions conducting monetary policies in the European Monetary Union. Getting a close look of the ECB monetary policy actions during the first twenty years of the EMU.
[BW] R. Baldwin, C. Wyplosz, The Economics of European Integration, 5th ed. McGraw Hill, 2015. Parts I, IV and V.
[DG] P. De Grauwe, Economics of Monetary Union, 12th ed., Oxford U.P., 2018.
[M] F. Mishkin, The Economics of Money, Banking, and Financial Markets, 12th ed., Pearson, 2019.
3. The ECB and the ECB's policies
Central Bank: Monetary Policy”, ECB W.P. 2219, 2018.
ECB Economic Bulletin, Issue 6/2017.
Issing, “Europe’s Hard Fix: The Euro Area”, speech at the Workshop on “Regional and International Currency Arrangements”, Vienna, 24 February 2006.
Draghi, “Introductory remarks at the EP’s Economic and Monetary Affairs Committee”, 2014
P. Hartmann and F. Smets, “The First Twenty Years of the European Central Bank: Monetary Policy.”
The course is an introduction to modern macroeconomics analysis based on first principles: planning optima, utility maximization, asset pricing and competitive equilibrium theory. The first part of the course focuses on dynamic efficiency and optimal growth with capital accumulation (the Ramsey Problem). The second part on optimal consumption, savings and asset accumulation from the individual point of view. We introduce the notions of inter-temporal budget constraints, Euler equations, consumption smoothing over time and states, risk aversion, precautionary saving and asset pricing. The third part of the course is devoted to the equilibrium restrictions on consumption and asset accumulation in competitive economies under two alternative frameworks: a finite number of infinitely lived individuals and overlapping generations. We will establish conditions under which an equilibrium configuration implies consumption smoothing and risk sharing and examples in which these properties may fail.