Macroeconomics I 22104 – 22105 2023-2024

GUIDELINES FOR DEBATES DURING SEMINARS

There will be 3 debates during the last 3 seminars. In each debate, two groups of students will have to defend a pre-
assigned position. The remaining students will participate by raising questions / making comments to the two
groups presenting. The structure of the debate is divided into three parts, and where the time limits will be strictly
enforced.

Part I - Presentation of the positions (20 min)

In this part, each group will have 10 minutes to present the arguments in favor of the assigned position, but without
highlighting the disadvantages/limitations of the opposing view (especially the second group presenting cannot
refer/criticize what was exposed by the first group).

Each group must prepare a presentation with supporting graphs and data about variables/countries, which should
be based on the suggested background readings (see below), the material covered in class, or any additional
information that is considered useful, as long as it comes from official sources which should be appropriately cited
--e.g., press articles, scientific articles but NOT personal blogs or webpages with unknown authorships (like
Wikipedia). All the group members must intervene, as the grade will be based on individual performance.

The presentation slides and other material used in your presentation should be sent through Turnitin before the
seminar (together with the week’s problem set). Please make separate submissions (one member submits the
problem set, and another submits slides).

Part II – Dispute of opposing position (10 min)

In this part, each group will have 5 minutes to dispute/criticize the opposing position, for instance, highlighting the
weaknesses of some of the arguments proposed by the other group or raising other points.

Part III – Questions from other students (10-15 min)

Each of the remaining 4 groups in the audience will have to raise an interesting (but short) question or comment to
one of the presenting groups, which will be graded. The questions/comments could be about the material presented
in the debate or aspects of the background readings that were not discussed. The seminar professor may also ask
some questions. The two presenting groups must then reply to the questions/comments.

EVALUATION:
The debate grade accounts 10 points toward your final grade (see PDA Continuous Evaluation). Participation in
debates will be evaluated according to the following scale: (3) Excellent, (2) Sufficient, and (1) Insufficient.

• The grade for the members of the two presenting groups (weight 75%) is individual and determined by the
clarity, logical coherence, and appropriate use of the terminology of each intervention.
• The grade for the comments/questions of the remaining groups (weight 25%) is the same for all members.

The final exam will include questions on the readings and the positions discussed in the debates.

Background readings can be found in Auxiliary Readings in Aula Global or through the links provided.

MACROECONOMICS I – 2023/24
 TOPICS and BACKGROUND READINGS

Debate 1. Costs and Benefits of Free Trade

Position 1a: Free trade is highly beneficial for most of society and should be promoted.

Position 1b: Free trade could be harmful and should be limited.

Background suggested readings

• Autor, David (2018) Trade and labor markets: Lessons from China’s Rise, IZA.

• Autor, David, Dorn David and Gordon Hanson (2013), The China syndrome: Local labor
market effects of import competition in the United States, American Economic Review 103(6).

• Rodrik, Dani (2018) What Do Trade Agreements Really Do? Journal of Economic
Perspectives. 2018; 23 (2): 73-90.

• Impullitti, Giammario and Omar Licandro (2018). Quantifying the gains from trade
https://voxeu.org/article/quantifying-gains-trade

• Baker, Bloom, Davis (2019). The extraordinary rise in trade policy uncertainty, 17 Sep 2019.
https://voxeu.org/article/extraordinary-rise-trade-policy-uncertainty

• Fajgelbaum, P, P Goldberg, P Kennedy, and A Khandelwal (2019), “The Return to

Protectionism,” NBER Working Paper No. 25638
https://voxeu.org/article/return-protectionism

• EU competition policy should not be sacrificed but trade policy should be strengthened. Jean,
Perrot, Philippon, Voxeu.org, 18 June 2019.
https://voxeu.org/article/eu-competition-policy-should-not-be-sacrificed-trade-policy-should-be-strengthened

• Worsening American Income Inequality: Is World Trade to Blame? Brookings Institution,

March 1996.
https://www.brookings.edu/articles/worsening-american-income-inequality-is-world-trade-to-blame/

• Shocks, international trade, and diversification: Lessons from the pandemic. WEF, May 2022.
https://www.weforum.org/agenda/2022/05/international-trade-learned-covid-19-pandemic/

• CEPR VoxEU.org Articles:

https://cepr.org/voxeu/columns/supply-disruptions-added-inflation-and-undermined-recovery-2021
https://cepr.org/voxeu/columns/role-global-supply-chains-covid-19-pandemic-and-beyond
https://cepr.org/voxeu/columns/supply-chains-and-trade-flows-volatility-face-global-shocks
https://cepr.org/voxeu/columns/inequality-and-trade-simulation-evidence-54-developing-nations

2
 Debate 2: Common currency areas with high inflation

Position 2a: In the context of high inflation, being part of a common currency area is a good
idea.

Position 2b: In the context of high inflation, being part of a common currency area is a bad idea.

Background readings (Papers can be found in Auxiliary Readings in Aula Global)

• Alesina, Alberto, Robert J. Barro, and Silvana Tenreiro (2002): “Optimal Currency Areas,”
NBER Macroeconomic Annual, 17, pp. 301-55.

• Eichengreen, Barry (2007): “The Breakup of the Euro Area,” NBER working paper, 13393

• Krugman, Paul (2013): “Revenge of the optimum currency area”, NBER Macroeconomics
Annual, 27(1), pp. 439-448.

• The Economist: “Fear of Floating,” June 11, 2009.

https://www.economist.com/special-report/2009/06/13/fear-of-floating

• Beynet, Pierre and Goujard, Antoine “The surge in inflation dispersion in the euro area: Key
drivers and policy responses”. VoxEU, Sep 2022.
https://cepr.org/voxeu/columns/surge-inflation-dispersion-euro-area-key-drivers-and-policy-responses

• Blanchard, Olivier “The United States and the eurozone face different challenges in battling
inflation”. PIIE, Oct 2022.
https://www.piie.com/blogs/realtime-economics/united-states-and-eurozone-face-different-challenges-battling-inflation

• Schnabel, Isabel “The Globalization of Inflation.” ECB, May 2022.

https://www.ecb.europa.eu/press/key/date/2022/html/ecb.sp220511_1~e9ba02e127.en.html

• Hernández de Cos, Pablo. “The inflationary episode in the euro area and the ECB’s monetary
policy normalization process.” Banco de España, May 2022.
https://www.bde.es/f/webbde/GAP/Secciones/SalaPrensa/IntervencionesPublicas/Gobernador/Arc/IIPP-2022-05-31-hdc-2-en.pdf

MACROECONOMICS I – 2023/24
 Debate 3. Fiscal policy: Austerity vs. Stimulus?

Position 3a: Fiscal austerity is more effective in stimulating demand than fiscal stimulus.

Position 3b: Fiscal stimulus is more effective in stimulating demand than fiscal austerity.

Background suggested readings

• Alesina, Alberto, Omar Barbiero, Carlo Favero, Francesco Giavazzi and Matteo Paradisi
(2015): “Austerity in 2009–13,” Economic Policy, Volume 30, Issue 83(1), pp. 383–437.

• Auerbach, Alan and Yuriy Gorodnichenko (2017): “Fiscal Stimulus and Fiscal Sustainability,”
NBER working paper 23789

• The Economist: “Sovereign Doubts,” Sept. 28 2013

• Christoph Boehm (2019) Government investment and fiscal stimulus.

https://voxeu.org/article/government-investment-and-fiscal-stimulus

• Pascal Michaillat, and Emmanuel Saez (2019) How to design a stimulus package
https://voxeu.org/article/how-design-stimulus-package

• Fatás, Antonio (2018): “Self-fulfilling pessimism: The fiscal policy doom loop”, VoxEU,
September 28, 2018.
https://voxeu.org/article/europes-fiscal-policy-doom-loop

• CEPR VoxEU.org Articles:

https://cepr.org/voxeu/columns/slow-recoveries-through-fiscal-austerity

https://cepr.org/voxeu/columns/procyclicalists-fiscal-austerity-vs-stimulus

https://cepr.org/voxeu/columns/shifts-expectations-may-undermine-debt-sustainability