Economics: Basic concepts and policy applications

This course deals with important challenges to (economic) policymakers. In the first session, we lay the groundwork and refresh basic analytical instruments in economics. We introduce and discuss a modern view of the role of economics and provide an overview of fundamental results from general equilibrium theory, and welfare economics. In the second session, we provide a thorough introduction to game theory and mechanism design. On this basis, we discuss why financial markets are important in practice. We analyze the role of financial intermediaries and the risks that are associated with financial intermediation. We compare traditional financial intermediation with recent innovations (peer to peer funding). Moreover, we study cases in which financial markets fail to work properly and we discuss appropriate policy responses. Sessions 4 and 5 are devoted to the analysis of fiscal and monetary policy measures that affect financial markets. In session 6 students present their casework on the design of a new financial and economic order in Europe.

This course is offered as an intermediate level replacement course for the C7 Applied Economic Analysis course. The course is designed for students who either have some prior knowledge in economics and would like to devote some time to refresh and extend some basics in economics and also to students with little prior knowledge in economics but the ambition to get a broad overview of advanced methods in order to apply them to practical political problems. Formal concepts that we use will be explained in detail along the way. Applications and experiments will play a prominent role during the first two sessions.