Macroeconomics and Public Institutions
elective for: MA in Economic Policy in Global Markets, MA in Global Economic Relations (full-time)
Course explores major contemporary issues in macroeconomic policies and institutions – drawing on
theoretical analysis, empirical evidence, and practical experience. Although the primary focus is on
advanced economies, coverage extends to emerging-market economies as well. Topics encompass basic
policy goals, instruments, applications, and their consequences. Against this background, the prevention
of, and policy response to, financial (banking, currency, fiscal) crises are explored. The course addresses
major challenges faced by policymakers in the recent U.S. and Eurozone crises, as well as earlier crises in
emerging markets. Particular emphasis is placed on institution-building to cope with these challenges and
on developing good practices toward achieving stability and growth. Lectures are grouped in four parts
that cover principal areas of macroeconomic policymaking: monetary policy and institutions;
macroprudential supervision and regulations; fiscal policy and institutions; and interactions and tradeoffs
among policy instruments.
The goal of the course is to expose students to hands-on application of analytical tools to real-world
macroeconomic issues faced by policymakers, within an orderly conceptual framework. It seeks to
familiarize students with the design and operation of monetary and fiscal institutions, as well as of
financial regulations, to strengthen good governance. Lectures, class discussion, readings, and
preparation of a policy memorandum should enable students to critically evaluate current macroeconomic
policymaking. Thus, the course provides a practical toolkit for students envisaging a career in public
service at home or abroad, or employment at a private financial institution. Alternatively, it seeks to
motivate students to pursue further graduate study or research on policy issues.
- Policy memorandum (35% of final grade). Student is expected to draft a brief policy
memorandum (addressed to an appropriate high-level government official) on a macroeconomic
policy issue in a country selected by the student. Grade is determined by analysis of the issue,
including supporting evidence, potentially useful for policymaking.
- Final examination (55% of final grade). Student is expected to select and answer two out of
three essay questions. Grade is determined by student’s ability to apply concepts, policy tools,
and institutional arrangements that are relevant to the question, with reference to class lectures
and readings, as appropriate.
- Class participation (10% of the final grade). Student is expected to interact in class, whenever
appropriate. Time permitting, student may have an opportunity to make a brief presentation of
the draft policy memorandum. Grade is determined by student’s contribution to better
understanding of course material.