Introduction to economics
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This course introduces economics to students completely new to the subject. The conversational yet precise style of this course is an excellent way of presenting the science of economics to tomorrow's decision makers. The course is designed to provide students with a sound conceptual understanding of the subject using contemporary examples where possible. It stands out amongst all other introductory economics courses by stressing the importance of economic conflicts and by encouraging students to apply an economic way of thinking to their analysis of government policies. The course covers the most important topics in positive political economy while reflecting European economic structures and institutions and adapting the language and cultural references to a European audience. For instance, the euro is the basic currency referred to throughout the course, and case studies and examples largely refer to the European economy and EU policies. These features are apparent when dealing with the EU's common agricultural policy, external trade policy, competition policy, VAT, the euro and ECB monetary policy. By the end of the course, students should be able to understand the market effects of government policies such as a the establishment of a minimum wage, a rent ceiling, a production quota, or a subsidy; the effects of taxation and the design of optimal tax systems, market failure (monopoly, externatilies, public goods) and public policies that deal with it, macroeconomic data, economic growth, as well as the long- and short-term effects of monetary policy and fiscal policy. They will also become acquainted with the political conflicts generated by economic policy, and economic explanations of policy making.
This is an international co-operative course that brings together teachers and students from different partner and non-partner institutions around the world. The course is structured in lectures and seminars, as well as written assignments to summurize the results of those discussions. A sophisticated continuous evaluation system measures student participation, personal learning and its impact on group progress.
Content and Language Integrated Learning (CLIL) is an approach for learning content through an additional language (foreign or second), thus learning both the subject and the language simultaneously. This approach to teaching and learning has never featured as strongly on university curricula as it does now. Besides, the great revolution of Information and Communication Technology (ICT) has had a tremendous impact on education and on the development of foreign language communication skills in particular. ICT is an ideal platform for strengthening interactive strategies and methodologies that promote independent learning, peer interaction, and language use for real communicative purposes. In a world where students are digital natives and where broadband connections and mobile-data enabled smartphones are widespread, there is great potential for combining CLIL with ICT. If we add to this the opportunities that international university partnerships and networks offer for student interaction across borders, we have all the necessary ingredients for a durable networking experience.
1. Guns or butter: what does economics deal with? Group Decisions and Power Relations: Why Political Economy? Positive and normative statements: Hume's guillotine. Three principles of positive political economy. One: Felix qui potuit rerum cognoscere causas. Two: It never rains to everyone's liking. Three: If you think a leader is stupid, you are most likely the stupid one. Why do people disagree about COVID-19 restrictions? (Mankiw, ch. 1-2; Krugman, ch. 1-2). 2. Supply and Demand: The only model you need to know. Quantity and price. Marginal utility and marginal cost. Movements along a curve opposite to curve displacements. Market equilibrium. Hypothesis Testing: Introduction to the Scientific Method. Is the current crisis different from the previous one? Why is everything more expensive? (Mankiw, ch. 4; Krugman, ch. 3). 3. Demand, supply and public policies. Price controls and rationing. Why set a minimum wage? Why do some cities cap rent hikes? Why do governments introduce wartime food rationing? Why did they introduce vaccine rationing during the pandemic? (Mankiw, ch. 6, pp. 111-120; Krugman, ch. 4). 4. Elasticity and its applications. Can a good harvest be bad news for farmers? Why do farmers accept EU environmental regulations? (Mankiw, ch. 5; Krugman, ch. 5). 5. Tax or fine: the two effects of a tax. Tax rate, tax base and government revenue. Elasticity and fiscal incidence. Optimal tax systems: sufficiency, efficiency and equity. A reduced VAT rate for food? Low income tax for IT professionals? Are EU competition fines a covert tax on foreign tech giants? (Mankiw, ch. 6: 120-128, ch. 8; Krugman, ch. 5). 6. International trade and protection. Tariffs, quotas and non-tariff barriers. Effects of an import duty. Trade winners and losers. Why does the EU impose an import duty on sugar of 42c per kg? (Mankiw, ch. 3+9; Krugman, ch. 19). 7. Mid-semester review. Welfare economics vs. positive political economy. Consumer surplus, producer surplus and tax revenue. Pareto efficiency? Does it make sense to aggregate national welfare? (Mankiw, ch. 7). 8. Externalities. Pigouvian taxes, quotas and tradable pollution permits. Rivalry and excludability: private goods, public goods and common resources. The interesting case of club goods. What is our optimal class size? (Mankiw, ch. 10-11; Krugman, ch. 9). 9. Monopoly. The costs of monopoly. Economies of scale and natural monopolies. EU competition policy. Should the EU allow the creation of European champions? (Mankiw ch. 15; Krugman, ch. 8). 10. Measuring the macroeconomy. Production, growth, employment, inflation, income distribution. Is Ireland the richest country in the EU? (Mankiw, ch. 23-24; Krugman, ch. 11). 11. Economic growth. The Harrod-Domar model. The neoclassical growth model and conditional convergence. Why is Romania growing faster than Germany? (Mankiw, ch. 25; Krugman, ch. 13). 12. Money and monetary policy. The monetary system. The money multiplier. Money Growth and Inflation. Inflation tax. Are cryptocurrencies money? Who creates money in Europe? (Mankiw, ch. 29-30; Krugman, ch. 16-17). 13. Fiscal policy. The multiplier effect. The crowding-out effect. Ricardian equivalence. How big is the government spending multiplier? The electoral business cycle: partisan and opportunist. (Mankiw, ch. 33-34; Krugman, ch. 15). 14. Introduction to public choice: group choice, collective action and institutions.
Mankiw, N. G. (2023). Principles of economics, 10th ed. Cengage learning; Krugman, P., Wells, R. (2023). Essentials of economics, 6th ed. New York: Worth; Acemoglu, D., Laibson, D. I., & List, J. A. (2021). Economics. 3rd ed. Pearson.