PP444      Half Unit
Brave New World: Macroeconomics at Times of Crises

This information is for the 2025/26 session.

Course Convenor

Availability

Requisites

Additional requisites:

2nd year SPP students with a completed PP440 Micro and Macro Economics for Public Policy course or equivalent

The proposed course examines the transformative shifts redefining global macroeconomics, focusing on their origins, trajectories, and implications. Central to the analysis are the ascendant forces of populism, authoritarianism, and the increasing influence of radical political parties across the Western world. These developments signify a departure from globalization, toward a more fragmented, insular global order.

The course investigates recent global and regional crises that have profoundly impacted economic and political systems. The Global Financial Crisis (GFC) revealed systemic vulnerabilities, while the Euro Crisis tested the structural integrity of the European Union. Brexit marked a significant macro-economic and geopolitical realignment, and the COVID-19 pandemic underscored the fragility of international governance frameworks, highlighting gaps in public health and economic resilience.

Further, the course interrogates escalating risks and threats, including the breakdown of institutions and effects on global trade and on global finance. These dynamics, compounded by the rise of plutocratic systems, exacerbate economic inequalities and weaken public trust in governance structures. The subsequent disruptions to global trade and finance underscore the systemic risks posed by these developments.

To ground theoretical discussions, the course integrates case studies from Turkey, Hungary, Israel, and Iran, offering empirical insights into democratic backsliding, political polarization, and macroeconomic instability. These examples elucidate the varying manifestations of shared global challenges and address macroeconomic and institutional responses to these phenomena.

The course equips participants with analytical tools to critically assess the nexus of macroeconomics and geo-politics.

Course Contents and Structure

Sea Changes in Political Economy -- National and Global

• The rise of populists and autocrats

• Processes of economic and financial de-globalization, break-ups, and dissociation

• Polarization and the emergence of radical political parties in the Western World

Recent Global and Regional Crises

• The Global Financial Crisis

• The Euro Crisis

• Brexit

• COVID-19

Risks and Threats

• Breakdown of institutions

• Effects on global trade and on global finance

• The re-emergence of plutocracy

• Attacks on the judicial system and on the media

Prominent Case Studies

• Turkey

• Hungary

• Israel

• Iran

Effects and Responses

• The public response

• Policy responses

16.5 hours of lectures and 10 hours of seminars in the Autumn Term.

This course has a reading week in Week 6 of Autumn Term.

Problem sets

Acemoglu, Daron and James A. Robinson, 2025. “Culture, Institutions, and Social Equilibria: A Framework,” Journal of Economic Literature, forthcoming.

Besley, Timothy, and Torsten Persson, 2019. "Democratic Values and Institutions," American Economic Review: Insights, 1, 1, 59–76.

Brunnermeier, Markus K., and Ricardo Reis, 2023. A Crash Course on Crises: Macroeconomic Concepts for Run-Ups, Collapses, and Recoveries, Princeton University Press.

Edwards, Sebastian, 2019. “On Latin American Populism, and Its Echoes around the World,” Journal of Economic Perspectives 33, 4, 76–99. 

Guriev, Sergei and Elias Papaioannou, 2022. "The Political Economy of Populism," Journal of Economic Literature 60(3), 753-832.

Guriev, Sergei and Daniel Treisman, 2019.  “Informational Autocrats,” Journal of Economic Perspectives 33, 4, 100-127.

Margalit, Yotam, 2019. "Economic Insecurity and the Causes of Populism, Reconsidered." Journal of Economic Perspectives 33,4,152–70.

Mounk, Yascha, 2022. "The Rise of Populism and the Decline of Social Democracy" Journal of Democracy 33(2), 5-19.

Noury, Abdul and Gerard Roland, 2020. “Identity Politics and Populism in Europe,” Annual Review of Political Science 23, 421-439.

Rodrik, Dani, 2021. "Why Does Globalization Fuel Populism? Economics, Culture, and the Rise of Right-Wing Populism," Annual Review of Economics 13, 133-170.

Rodrik Dani, 2024. “Reimagining the Global Economic Order,” Review of Keynesian Economics 12, 3, 396-407.

Stiglitz Jsoeph E and Dani Rodrik, 2024. “Rethinking Global Governance: Cooperation in a World of Power, “working paper.

Ziblatt, Daniel and Steven Levitsky, 2021. "The Durability of Democracy and the Rise of Authoritarianism" Daedalus 150, 3, 6-20.

Exam (70%), duration: 180 Minutes in the Spring exam period

Continuous assessment (30%)