Macroeconomic Policy in the New European Union Member States

The objective of this course is to provide students with a foundation in macroeconomics, on which the subsequent macroeconomic policy analysis is based. The Mundell-Fleming model is one of the analytical cornerstones of this course, and is applied to data and policy examples from the new EU member states, assessing the appropriateness or inappropriateness of policy initiatives according to the model. An alternative methodology for policy analysis is introduced in the form of game theory. This leads to an exposition of strategic behaviour in the policy arena, incentive structure, and design of policy to achieve desired outcomes. In the framework of the course an overview about the most topical trends and issues in the economic development of the Baltic States will be also provided. The main emphasis will be put on the analysis of economic development of the Baltic States since 1990 up to now from macroeconomic policy, structural policy and institutional point of view.