Macroeconomic Policies


The objective of the course is to consolidate and enlarge macroeconomic concepts and models acquired by students in previous macro courses and illustrate their use for applied economic policy analysis and decision making. At the end of the course students should have a coherent conceptual framework to analyze current macroeconomic developments and discuss policy issues. The course has three main building blocks. Firstly, the determinants of long term economic growth and fluctuations are examined. Secondly, the macroeconomic models are revised and enlarged to include dynamic components and highlight the role of expectations and external linkages. Thirdly, the course discusses applied economic policy issues and current developments.

General characterization





Responsible teacher

João Amador


Weekly - Available soon

Total - Available soon

Teaching language



Mandatory Precedence:

- 1101. Principles of Macroeconomics


The course does not follow one single book. The books by Mankiw (Macroeconomics, Worth Publishers) and Blanchard (Macroeconomics, Prentice Hall) are important to consolidate macroeconomic models and concepts. In addition, the book ``The Portuguese economy in the context of economic financial and monetary integration´´, edited by the Economics and Research Department of Banco de Portugal provides illustrations of tools for applied economic policy analysis. Furthermore, specific papers will be signaled along the course.

Teaching method

Theoretical lectures and practical sessions where students build bridges between macroeconomic models and real-life policy implications. Assignments based on collecting and manipulating macroeconomic data to analyze current macroeconomic debates.

Evaluation method

The evaluation is composed of three blocks: i) Practical evaluation (20%) ii) team assignments (30%) and iii) final exam (50%). The practical evaluation consists of two short quizzes to answer in class, including a multiple-choice component. The team assignments comprise two reports to be delivered in specified dates: a) An estimate of quarterly GDP growth for the Portuguese economy and b) An assessment on the contribution of the public and private sectors to the global imbalances. The estimate of Portuguese GDP growth for the 4th quarter of 2019 is performed in real time and it is based on high-frequency data. The assessment on the global imbalances relies on yearly national accounts data. Groups should have four students (minimum of three and maximum of five). The final exam includes all topics covered in class and a minimum grade of 9 is required for passing.

Regular Exam Period
Continuous assessment elements (and their weights):
2 Quizzes: 10% each
2 Assignments: 15% each

Final exam (and its weight): 50%

Resit Exam Period
Continuous assessment elements (and their weights):
2 Quizzes: 10% each
2 Assignments: 15% each

Final exam (and their weighting): 50%

Grade Improvement in Regular Period
Final exam (and its weight): 100%

Grade Improvement in Resit Period
Final exam (and its weight): 100%

Subject matter

1.    Economic Growth and Fluctuations Production function and the sources of growth Solow growth model
Growth accounting and potential output Economic fluctuations and their causes
High-frequency economic data and national accounts estimates

2.    Macroeconomic Models
The IS-LM model (brief consolidation)
The Mundell-Fleming model and co-ordination of policies Static aggregate demand and supply
Labour market and expectations Dynamic aggregate demand and supply

3.    Economic Policy Analysis
3.1.    Monetary policy in practice
Money market interventions
Monetary policy transmission mechanism
The European Central Bank and the Federal Reserve

3.2.    Fiscal policy in practice
Budgetary process
Cyclically adjusted primary general government balances Public debt dynamics
Stability and growth pact

3.3.    Structural policies Product market regulation Labour market regulation Other structural policies


Programs where the course is taught: