The course is intended to present the most relevant economic theories in order allow students to learn the economic reasoning necessary to understand how the economic system and the markets work.
After a description of the main macroeconomic problems and the tools necessary to understand the structure of an aggregate economic system, the two most important theories about the functioning of an economic system will be presented. The first one is the neo-classical school, which represents the micro-foundation of the mainstream macroeconomic theory whereas the second one is the Keynesian one. Both theories focus on how resources are allocated in the short run. The last part of the course will deal with open macro-economics, i.e. the equilibrium of an aggregate economic system open to exchanges in goods, services and capitals with the rest of the world.

The specific goals of the course are to provide the students with:

1. the knowledge of the main economic theories on the functioning of an aggregate economic system;
2. the ability of critically interpret the news about the economic conditions of a country and of the rest of the world.

Students will learn basic economic concepts. The will also learn how to apply economic theory to analyse the economic conditions of a country and the scope for public policy in the forms of monetary and fiscal policies.

Basic knowledge of maths and calculus.

The course is divided into three parts: the first part is devoted to national accounts and the analysis of the economic system; the second one deals with the basic microeconomics, and in particular consumer theory, firm behaviour and market functioning (perfect competition and monopoly). The third part deals with macroeconomics and the open economy. The detailed syllabus is the following:

First part. National Accounting: (10 hours)
1. Problems and definitions of political economy;
2. National accounts;
3. Modeling the economic system;

Second part. Modern microeconomics: (40 hours)
4. The economic system and its functional operators: households (consumption, savings and supply of labour);
5. The economic system and its functional operators: firms (production, investments and demand for labour)
6. Market analysis: perfect competition and monopoly;

Third part. Modern macroeconomics: (30 hours)
7. The financial market and the demand and supply of money;
8. From neoclassical microeconomics to the full employment macroeconomics: the market of labour, the theories on the interest rates, the role of economic policy;
9. Unemployment in keynesian macroeconomics: the IS-LM and AD-AS models
10. Open economy: the Balance of Payments, the internal and external equilibrium with fixed and flexible exchange rates.

The course is organized into lectures and exercise sessions. Moreover, real case phenomena and case studies will also be presented in class within the lectures.

Lecture notes are uploaded on the course website in the Material folder. They constitute the teaching material shown in class in support of the lecture and contain the knowledge deemed necessary for the examination. The suggested additional textbooks, for an optional deeper understanding of Economics, are: "Microeconomics", by Rubinfeld, and "Economics", by Begg, Vernasca et al. Students will also be provided with solved exercises as well as with texts and solutions of past exams.

Written exam (2 hours in total). The text of the exam is made by two numerical exercises (10 points each) and five TRUE/FALSE questions, to be mandatorily motivated (2 points each). Hence, the weight of each exercise on the final grade is the same.