The course is divided into two parts. The first takes a microeconomic approach to equip students for
understanding the workings of the markets in which firms operate, and the modes
of competitive interactions between firms. The themes of innovation and safeguarding correct market competition are
examined, in line with the ideas of Industrial Economics.
The second part of the course takes a macroeconomic approach to the key
problems of economic policy.
The aim is to illustrate the pathologies that can affect an economic
system and the methods and instruments which Economic Policy authorities can
use to remedy such problems. The topic areas
of unemployment, inflation and public debt are studied, alongside the most
important Economic Policy levers, i.e. the monetary
and fiscal levers, income policies, and policies for stimulating growth.
Syllabus
SECTION
1 – 1^{ST} SEMESTER
1. Industrial
economics: the fundamental problems. Review of Microeconomics and Games Theory
2. Monopoly,
perfect competition and monopolistic competition
3. Horizontal
boundaries of the firm
4. Vertical
boundaries of the firm: "Holdup"
and double marginalization (ONLY for students who choose examination method 1)
5. Strategic
interaction. Bertrand's Paradox and its
avoidance: I) Capacity constraints
6. Strategic
interaction: Cournot competition
7. Avoiding
the Bertrand Paradox: II) Dynamic
Competition and Collusion
8. (Continued)
Collusion
9. Avoiding
the Bertrand Paradox: III) Product differentiation
10. Advertising
11. Market
power and Concentration
12. Structure
of the market and cost of entry
13. Deterrence
to entry and proliferation of products: the case of breakfast cereals (ONLY for students who choose examination method
1)
14. Mergers
and acquisitions and antitrust policy: the
HeinekenBirra Moretti case
15. Innovation
and R&D (Research & Development)
16. Industrial
dynamics: Evolution of the industries (ONLY
for students who choose examination method 1)
SECTION
II – 2^{nd} SEMESTER
Introduction.
·
Economic analysis and the construction of macroeconomic scenarios for economic policy
·
The (apparent) dichotomy between shortterm andlongterm (reference to AS/AD model)
SECTION
I. INSTRUMENTS
1.1
Macroeconomic data: organisation, format,
characteristics and properties
1.
Longitudinal and time
series data
2. Census and sample data
3. Administrative, quantitative and qualitative data
4. Surveystudies
5. Some data algebra
5. 1 Values at current and constant prices
5. 2 Growth rates and their transformations
5. 3 Composite indicators and index numbers
SECTION
II.ECONOMIC CYCLE AND
FORECASTS
2.1 The
Economic cycle: Methodological
aspects.
1. GDP
and its transformations (per capita, growth rates, etc.)
2. Components
of GDP and the other real variables
3. Definition
of the economic cycle and its characteristics
4. Causes
and implications of the cycle
5. Some
interpretative theories
6. History
and phases of the economic cycle: Italy, Europe, the
world
2.2 Macroeconomic
data for analysing the cycle: overview of
some empirical methods
1. Correlation
analysis
2. Linear
regression (Lesson plan n. 2)
3. Multivariate
statistical analysis.
3.1 Analysis
of the main components
3.2 Cluster
analysis
3.3 Discriminant
analysis
2.3 Empirical
analysis of the economic cycle
1. Randomness
and regime changes (handling of outliers)
2. Seasonality
3. Standardization
and normalization
4. Ranking [01] and rating
5. Separating
the cycle from the trend
6. Use
of moving averages for "smoothing" the series
7. Treatment
of qualitative and cyclical trend data
2.4 Models for estimating and forecasting
1. Forecasting
and techniques for constructing economic scenarios
2. Measures
of the cycle and coincident and anticipatory indicators
SECTION
III.ANALYSIS OF THE
MACROECONOMIC SCENARIO
3.1 The
money market
1. The
monetary economy
2. Monetary
policy and shortterm interest rates
3. Rules
and systems of monetary policy
Taylor
rule
Interest rate targeting
Money targeting
Inflation targeting
4. The
European system and its pillars
5. Determinants
of interest rate behaviour and how to predict their evolution
6. The
link between short and long term rates and the yield curve
3.2 The
currency market
1. Types
and determinants of exchange rates
2. International
competitiveness: some measures not
based only on exchange rates
3. How
to anticipate their movements
4. Purchasing
power parity and the Big Mac Index (of which you can see both the 2005 table
and its 2006 evolution)
5. Currency
policies
6. Exchange
rates and financial markets: uncovered
interest rate parity.
7. Currency
risk and its management
3.3 Prices
and inflation
1. Measurement
and general characteristics
2. Causes
of inflation
2.1 Short
and long run
2.2 Demand
and costs
3. Consequences
of inflation on firms, families, the state and on the economic system as a
whole.
4. How
to defend against inflation.
3.4 Public
accounts
1. Definitions
and role of the public sector.
2. Quick
overview of the theories on financing of expenditure and on the sustainability
of public debt.
3. Distortions
connected with the tax burden.
4. The
unpleasant monetarist arithmetic
5. Ricardian
equivalence
3.5 The
supply side:
1. The
labour market
2. Industry
and its indicators
SECTION
IV.ECONOMIC GROWTH
4.1 Economic
growth:
1. Outline
of the theory
2. The
international and national situation: past,
present and prospects
3. Role
and measures of productivity
4. Role
of capital accumulation and of technological progress
5. Growth accounting
SECTION
V.IN SUMMARY.
5.1 A
summary view: taking the "pulse of the
economy":
5.2 Reconstruction
of the macroeconomic scenario for a European country
Examinations
SECTION
1 – 1^{ST} SEMESTER
There
will be a written examination at the end of the course.
Students
can choose between two examination methods.
Examination
method 1 consists of four topics to be discussed
(evaluating whether the proposed statements are True, False, or Uncertain) and
two openended questions, dealing with the material covered during the
lectures.
Examination
method 2 covers all the material presented
during the lectures, with the exclusion of lessons 4, 13 and 16 of the syllabus. In place of the excluded material, students must attend 4 tutorial sessions
(dealing with the same topics covered during the lectures). The exam will
consist of four questions to be discussed as in Examination method 1
(evaluating whether the proposed statements are True, False, or Uncertain) and
an exercise similar to those done during the tutorial sessions.
SECTION
II – 2^{ND} SEMESTER
·
There will be only a written examination
at the end of the course.
·
There will be no intermediate progress tests.
· Students will have the opportunity (optionally) to complete
group projects in the form of mini research papers. The grades earned for the optional projects can add up to 3/30 to the result
of the written test.
Reading list
SECTION
1 – 1^{ST} SEMESTER
COURSE
TEXTBOOKS
The
required course textbooks (for the specified parts of the course) are:
¨ Cabral L. (2002), Economia
Industriale, Carocci editore
¨ Besanko D., Dranove D., Shanley M.
(2001), Economia dell'Industria e Strategie d'Impresa, UTET
¨ Garavaglia C. (2006), Economia
Industriale: Esercizi e Applicazioni, Carocci editore
to
be completed with:

Lecture notes

Materials and slides supplied by the lecturers (NOTE: The slides and materials distributed by the lecturers during the course
are an integral part of the programme and will be covered in the examination. The slides can be downloaded from the course website, which will be
updated on a weekly basis).

Additional reading materials and textbooks for further study will be set during
the lectures.
SECTION
II – 2^{ND} SEMESTER
Course
textbooks:
(SOLE): "Come si legge Il Sole 24
Ore", 7ma edizione, 2004, disponibile in biblioteca.
(GEI): "Guide to economic
Indicators: making sense to Economics", The Economist, Fifth Edition,
2003, disponibile in Biblioteca
(CIP): "Congiuntura Economica e
previsione", di Innocenzo Cipolletta, Il Mulino, 1992, disponibile in
Biblioteca
(MS): "Macroeconomia ", di
D.Miles e A.Scott, 2006, Zanichelli disponibile in Biblioteca