Macro-economics and Policy


Course Objective

Evaluation of Economic Research & Economic Policies
After successfully completing this course:
• You can identify the main findings of economic research papers and
evaluate their quality and usefulness for policy advice.
• You can evaluate - in a policy paper - the extent to which a given
recommendation concerning fiscal and related macroeconomic policies is
supported or undermined by existing economic research.

After successfully completing this course, you can reflect on the extent
to which your existing knowledge and understanding enables you evaluate
specific macroeconomic policies, and identify the key issues which you
would like to understand better to give an even better evaluation.

Knowledge & Understanding of Empirical Macroeconomics
After successfully completing this course:
• You can demonstrate your knowledge and understanding of concepts
related to the identification of causal effects in empirical
macroeconomic research (e.g. simultaneity, omitted variable bias,
instrumental variables) by discussing and evaluating the identification
strategy used in macroeconomic research papers.
• You can formally analyze identification strategies for causal effects.

Knowledge & Understanding of Macroeconomic Policy Institutions
After successfully completing this course, you can demonstrate your
knowledge and understanding of the institutions of European fiscal

Knowledge & Understanding of Macroeconomic Theory
After successfully completing this course:
• You can demonstrate your knowledge and understanding of theoretical
arguments concerning fiscal and related macroeconomic policies (based on
theories and models you have encountered before, e.g. IS-LM and the
Solow model, as well as additional theories and models we decide to
examine in this course) by integrating them into short essays and policy
• You can formally analyze the implications of varying the assumptions
of relatively simple macroeconomic models.

Course Content

In recent years, policy makers in Europe have been confronted with
decisions about fiscal policy and related macroeconomic policies (e.g.
structural reforms) that raise important questions. Was fiscal austerity
necessary or misguided? Is fiscal stimulus actually effective in
recessions? Are current levels of government debt too high or is this
the time for more public investment? Do tax cuts boost growth? Do
structural reforms contract the economy in the short run? Is the
framework for European fiscal governance (including rules such as the
Stability and Growth Pact) working reasonably well, or are drastic
changes needed?

In this course we will study fiscal policy and related macroeconomic
policies by focusing on the concrete case of one country. We will choose
a country based on the current macroeconomic situation, in 2018 the
course focused on Italy. You will put yourself in the shoes of policy
researchers that provide fact-based economic analysis with the goal of
improving economic policy. Your task is to provide an analysis and make
a recommendation on how the European Commission and the European Council
should respond to the budget proposed by the Italian government.

Teaching Methods

Lectures (4 hours per week)
Seminars (4 hours per week, attendance required)

Method of Assessment

Two written tests (25% each)
Individual Assignments (Problems Sets and Essays) (25%)
Team project (25%)
Seminar assignments (pass/fail)


We provide extensive notes and videos and assign additional readings
from newspapers and magazines, blogs, and academic journals.
You do not need a new textbook for this course. We will use the textbook
from Development of Macroeconomic Thought as a reference: McDowell,
Thom, Pastine, Frank, Bernanke (2012) Principles of Economics ,3rd
European Edition, McGraw Hill.
Another useful reference is the book you have used in the methods part
of Microeconomics and Method: Angrist, J. and Pischke, J-S. (2015),
Mastering Metrics: The Path from Cause to Effect, Princeton University

Target Audience

Second year PPE students.

Additional Information

Please note that participation in the seminars is mandatory.

Custom Course Registration

There is a slightly different enrollment procedure for this module. The standard procedure of the Faculty of Humanities has students sign up for (i) the module, (ii) the form of tuition (lecture and/or preferred seminar group), and (iii) the exam. However, for this module the instructor will assign the students to the seminar groups. Therefore, students should sign up for (i) the module, (ii) lecture and (iii) the exam, but not for the seminar groups.

Recommended background knowledge

Mandatory courses PPE specialization Track 2: Economics

General Information

Course Code W_JSM_206
Credits 6 EC
Period P2
Course Level 200
Language of Tuition English
Faculty Faculty of Humanities
Course Coordinator dr. B.A. Brugemann
Examiner dr. B.A. Brugemann
Teaching Staff dr. B.A. Brugemann

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Lecture, Seminar*

*You cannot select a group yourself for this teaching method, you will be placed in a group.

Target audiences

This course is also available as: