Universidad Pública de Navarra - Nafarroako Univertsitate Publikoa

Module/Subject matter

Applied economics.

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Contents

1. The subject offers different frameworks that allow interpreting the causes of the behavior of short-term economic policy objectives.

2. A set of tools will be used to analyze the behavior of economic variables and the interrelationships established in an economic system, always from the perspective of public intervention in the economy. In this sense, a rigorous description of the institutional framework in which the decisions will be made, and specifically of the Central Banks of US and Japan, as well as those responsible for discretionary fiscal policies.

3. The main sources of information on the strategy and practice of economic policy will be presented. Students will analyze the basic documents: Federal Reserve balance sheet, public presentations by Board of Governors of the Fed members; Documents prepared by the Congressional Budget Office; Economic Report of the President; Reports and articles published by the Bank of Japan and articles in scientific journals.

4. The main econometric methodologies and approaches used in Central Banks will be used to carry out comparative economic policy analysis in practical lessons.

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General proficiencies

CB04 - Students are able to transmit information, ideas, problems and solutions to both specialist and non-specialist audiences.

CG01 - A capacity for analysis and synthesis.

CG03 - Oral and written communication in their mother tongue.

CG06 - The ability to search for and analyse information from different sources.

CG14 - Critical and self-critical skills.

CG17 - A capacity for self-reliant learning.

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Specific proficiencies

CE01 - Understand economic institutions as the result of theoretical or formal representations of modern economies.

CE02 - To identify sources of economic information relevant to their particular enterprise and their contents.

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Learning outcomes

R03 - National and international economic reality, productive sectors, public sector, economic institutions and their evolution.

R13 - Spanish economy, world economy and economic history.

R27 - Limitations of Economic Theory. Current research areas and outstanding problems.

RA1 - Understand the logic of the practice of monetary and fiscal policy in the United States and Japan.

RA2 - Analyze the monetary and fiscal policy decisions adopted in the United States and Japan.

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Methodology

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Evaluation

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Agenda

Part 1: Monetary and Fiscal Policy in the USA

1 The conduct of Monetary Policy

1.1 Origins and Structure of the Federal Reserve System

1.2 Monetary Policy Strategy

1.3 Conventional and Nonconventional Monetary Policy Tools

1.4 Fed Policy Procedures: Historical Perspective

2 Fiscal Policy

2.1 The Federal Budget

2.2 Fiscal Policy Multipliers in the US and Cross-Country Interactions

2.3 Automatic Stabilizers

2.4 Fiscal Policy Rules vs Discretion

2.5 Fiscal Policy and Income Inequality Trends

2.6 Economic Policy and Financial Instability: monetary and fiscal policy during the Great Recession

Part 2: Economic Policy in Japan

3 Economy and Economic Policy in Japan since 90s

3.1 A growthless decade, assets depreciation and deleveraging

3.2 The collapse of the financial system

3.3 The limits of the Monetary Policy

3.4 The Public Budget in Japan. Automatic Stabilizers

3.5 Discretionary Fiscal Policy during the 90s

3.6 The relationship between Monetary and Fiscal Policies

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Bibliography

Access the bibliography that your professor has requested from the Library.

Main References:

Federal Reserve (2016): Federal Reserve System. Purposes and Functions. 10th Edition. Board of Governors of The Federal Reserve System.https://www.federalreserve.gov/aboutthefed/files/pf_complete.pdf

Mishkin, Frederic S. (2016): The economics of Money, Banking and Financial Markets 11th edition, Pearson Education.

Further reading:

Ahearne, A., Gagnon, J. et alli (2002): "Preventing Deflation: Lessons from Japan's Experience in the 1990's", International Finance Discussion Papers No. 729. Board of Governors of the Federal Reserve System.

Atkinson, A. B. Piketty, T. and Saez, E. (2011): "Top Incomes in the Long Run of History". Journal of Economic Literature 49, (1): 3-71.

Bernanke, Ben S. (2012): "Lectures on the Federal Reserve and the Financial Crisis", available on https://www.federalreserve.gov/aboutthefed/instructor-resources.htm

Dabla-Norris, E., Kochar, K., Suphaphinat, N., Ricka, F. and Tsounta, E. (2015): "Causes and Consequences of Income Inequality: A Global Perspective". IMF Staff Discussion Note. SDN/15/13.

Dell¿Ariccia, G., Rabanal, P. y Sandri, D. (2018): Unconventional Monetary Policies in the Euro Area, Japan, and the United Kingdom. Journal of Economic Perspectives, 32 (4): 147¿172.

Kuttner, K. N. (2018): Outside the Box: Unconventional Monetary Policy in the Great Recession and Beyond. Journal of Economic Perspectives, 32 (4): 121¿146.

Mishkin, F. (2011): Monetary Policy Strategy: Lessons from the crisis, NBER Working Paper Series, Working Paper 16755.

Taylor, J.B. (2000): "Reassessing Discretionary Fiscal Policy", Journal of Economic Perspectives, 14(3): 21-36.

Taylor, J B (2012): "Monetary Policy Rules Work and Discretion Doesn't: A Tale of Two Eras", Journal of Money Credit and Banking, 44(6), 1017-1032.

Ueda, Kazuo (2012): "Deleveraging and Monetary Policy: Japan Since the 1990s and the United States Since 2007", Journal of Economic Perspectives, vol. 26 (3): 177-202.

Woodford, M (2001): "The Taylor Rule and Optimal Monetary Policy", The American Economic Review, 91(2), 232-237.

Woodford, M (2011): "Simple Analytics of the Government Expenditure Multiplier, " American Economic Journal: Macroeconomics 3(1):1-35.

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Languages

English.

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Location

Aulario de la Universidad Pública de Navarra en Pamplona.

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