Microeconomics II

(1.5 Credits)

This course is an introduction to the study of general equilibrium theory in economics. The approach adopted in the course aims at introducing the theory as the canonical theoretical structure for the study of market economies. Competitive equilibria are therefore studied as the main micro-foundation for macroeconomics and finance. The series of fundamental theorems which constitute the classic theory of general equilibrium, concerning existence, characterization, and welfare properties of competitive equilibria in frictionless economies, are introduced in their rigor, abstraction, and elegance. But the course will complement the classic theory with the modern analysis of financial market equilibria in dynamic economies with different kind of frictions, exposing students to fundamental conceptual notions like complete and incomplete markets, constrained inefficiency, moral hazard, adverse selection, bubbles. Topics will be enriched with a study of interesting applications of the concepts and results.