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Political Economy (ECO106)

 Annotation

This course introduces students to the interplay between political institutions and economic processes and outcomes.  The course consists of two parts.  In part one, students will learn the key theories of economic growth (Neoclassical, Endogenous Growth, Import Substitutions Industrialization), as well as the historical background of the attempts at economic development throughout the XX century.  In the second part of the course, students will learn about the consequences of key political institutions (regime type, voting rules, structure of interest group competition) for the implementation of economic policy, as well as for such economic indicators as the size of government, corruption, re-distribution and economic growth.  The main goal of the course is to provide theoretical knowledge and practical tools that are required for academic research of economic policy as well as for practical policy-related decision-making.

Aim of the course

This course unit aims to provide an understanding of theoretical and empirical issues, regarding decision-making in the matters of economic policy: redistribution, fiscal policy monetary and exchange rate policies, industrial policy and measures to prevent corruption.

Learning outcomes

  • Analyze literature on Economic Growth, identify its theoretical assumptions and empirical predictions.
  • Identify the effects of different policy-making institutions as agenda-setting tools of economic policy.
  • Evaluate economic and political institutions in terms of their susceptability to corruption. Model optimal anticorruption measures.
  • Explain rationale for interpersonal and intra-personal  redistribution of resources. Model the effect of political institutions on the level of redustribution.
  • Model the economic effects of fiscal policy decisions and political motivations for the choice of fiscal policy.
  • Model the economic effects of monetary policy decisions and political motivations for the choice of fiscal policy.
  • Explain Exchange-rate policines of individual countries, as well as the formation and maintenance of common currency areas.
  • Analyze industrial policy decisions under a variety of political institutional contexts.
Syllabus
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