Università Roma Tre

Introduction: The big picture about how the global economy came to look as it does today.
Economic decision making
• Choosing a technology, given factor prices: Doing the best you can: incentives, innovation rents. Equilibrium.
• Working hours: Doing the best you can within a feasible set: indifference curves, feasible frontier, MRS = MRT
Economic relationships and interactions
• Strategic interactions: Doing the best you can, given what others do: social dilemmas, self-interest, social interest, altruism, public goods, external effects
• Bilateral trade: Doing the best you can, given what others do, and given the rules of the game: institutions, bargaining power, Pareto efficiency, fairness
• Employment relationship: Doing the best you can, given what others do and the rules of the game, when contracts are incomplete
Markets
• Firm producing a differentiated good, setting the price: Profit maximization (demand plus isoprofit curves); costs, competition, market failure
• Supply and demand; price-taking and competitive markets: Prices as messages. Competitive equilibrium; price-taking firms and Pareto efficiency.
• Labour market: From wage-setting (Unit 6) and price-setting (Unit 7) to the whole economy
• Credit market: Consumption smoothing; borrowing and lending; incomplete contracts; money and banks
• Markets, efficiency, and public policy: Property rights, incomplete contracts, externalities

The aggregate economy
• Economic fluctuations and aggregate demand: Consumption-smoothing and its limits, investment volatility as a coordination problem, measuring the aggregate economy
• Fiscal policy and employment: Components of aggregate demand, multiplier, demand shocks, government finance, fiscal policy
• Monetary policy, unemployment, and inflation: Phillips curve, expectations and supply shocks, inflation targeting, transmission mechanisms, including exchange rate
• Technological change and employment: Aggregate production function and productivity growth. Institutions and comparative economic performance
• The role of the State

The reference books are:
The CORE team, The Economy 2.0 MIcroeconomics and The CORE team, The Economy 2.0 Macroeconomics
freely available at https://core-econ.org/the-economy/index.html