Digital economy is the economic activity that results from billions of everyday online connections among people, businesses, devices, data, and processes. The first part of the course (first semester) will introduce students to the main microeconomic theories, providing them with tools to understand digital economic developments and policy debates, and the ability to assess microeconomic and digital trends. The second part (second semester) will introduce students to the main macroeconomic variables and look into business models of the digital economy, practices of main digital tech-firms as well as provide a detailed view on blockchain technology and cryprocurrencies.
Titular Professors
Professors
None
The popularization and widespread use of digital technologies, together with the decline in prices and the increase in the benefits of these technologies, has led to the emergence of new activities in both the public and private sectors. Therefore, the main objective of this course is to provide an understanding of the basic concepts related to these specific trends and, then, to relate them to the new social and economic changes that are emerging as a result of the massive use of new digital technologies. At the end of this course, students should have a basic understanding of: - Understand the determination of supply and demand. - Understand market forces and the determination of prices. - Understand the processes of intermediation and disintermediation of the main digital platforms. - Know the characteristics and functioning of how product and service markets work in the real world, and the applicability and relevance of the theory to understanding these markets. - Understand macroeconomics and the circular flow of income. - How to measure and interpret economic variables such as GDP, CPI, etc. - Key relationship between savings and investment and the determination of interest rates. - Understand the origins of the digital economy through the most recent history of information technologies and computing. - Impact of the digital technological revolution in the creation of new markets. - Social aspects of contemporary business models, with special attention to the popularization of cryptocurrencies.
FIRST SEMESTER: TOPIC 1. Introduction to the digital economy and the data pyramid. What is the digital economy? What are the differences between micro and macroeconomics? Neutrality of the digital economy and the data pyramid. TOPIC 2: The digital economy in the media. Technological determinism in traditional media. Is digitization really increasing the productivity of countries? TOPIC 3: Current data of the digital economy. Key micro and macroeconomic data of the digital economy in different countries. The added value of digital data. TOPIC 4: Market forces of supply and demand. The price mechanism, the interaction of supply and demand, and the equilibrium price that self-regulates the market. TOPIC 5: Elasticity and its applications.The sensitivity of supply and demand to changes in prices and income and the effect on total revenue and profits. How elasticity defines different types of goods. TOPIC 6: Private goods and public goods. The different types of goods and their level of excludability. How do we analyze digital data according to this classification? TOPIC 7: Digital goods and services: properties and marginal costs. Particular properties of digital goods and opportunity costs. Production costs and marginal costs. Definitions of SaaS, PaaS, and IaaS.
SECOND SEMESTER: TOPIC 1: Measurement of a nation's income. The circular flow of income and Gross Domestic Product (GDP). TOPIC 2: Measurement of the cost of living. Consumer Price Index and GDP deflator; the difference between real and nominal economic variables. TOPIC 3: Production and growth. Determinants of long-term economic growth: capital accumulation, population growth, and productivity. UNIT 4: Economic Practices through the main digital tech-firms (Part 1 and Part 2). Influence of algorithms on digital search engines. Relationship of platform capitalism to online advertising. Introduction to the effect of "filter bubbles" on society. Definition of "Intermediations" and "Reintermediations". Case analysis through Google, Uber, Airbnb, and Facebook. UNIT 5: Introduction to business models of the digital economy (DEBM). Brief analysis of the more "subversive" DEBM in terms of monetization, e-commerce, and other specific properties of digital markets. UNIT 6: Introduction to cryptocurrencies and blockchain. Distributed/shared ledger systems and the "materiality" of digital systems. Differences from traditional financial systems. Definition of the "proof of work" system.
The lecture component of the course will follow closely the structure and content set out in the following textbooks and reports: Economics, by Gregory Mankiw and Mark Taylor; The Digital Economy, by Tim Jordan; The Global Digital Economy, by Carin Holroyd and Kenneth Coates; Digital Cash, by Finn Brunton; Social Business Models in the Digital Economy, by Adam Jab?o?ski and Marek Jab?o?ski; Introduction to Digital Economics: Foundations, Business Models and Case Studies, by Øverby, H., & Audestad, J.
Students are expected to come to class prepared, having completed a first approximation to each topic. Lecture slides will be available to download, and casual online videos will also be referenced for class preparation and review. Good preparation will generate more time for interactive class sessions and project work. Students will form project groups for both the first and second semesters. While the first semester project will involve collecting and analyzing data through everyday digital applications, the second semester project will focus on the analysis of so-called 'Digital Economy Business Models'. These projects will need to be submitted and presented before the end of each semester. In addition to group tasks, weekly activities will also be assigned to assess students' understanding of the material covered in class. This should help students develop study routines for the subject and face exams with confidence.
The main methodologies used for this course are:
MD.0Master class
MD.1Problem-oriented classes and exercises
MD.4Seminars
MD.6Project-based learning
Participation 10% Group Project 20% Homework completion 10% Mid-term exam 30% Final examination 30%
Retake policy: To pass the course, students must complete all components. Failure to attempt any component will result in an automatic fail (grade 4) and require retaking the course the following academic year. Students who fail the market project component will automatically fail the course.
WRITTEN REPORT RUBRIC:
Criteria | 1 Point | 2 Points | 3 Points | 4 Points | 5 Points |
Introduction and Background. | Lacks clear introduction; company, product, and market are not defined. | Limited introduction; company, product, or market details are vague. | Basic introduction; company, product, and market are defined but lack depth. | Clear introduction; good definition of company, product, and market. | Engaging introduction; thorough and clear definition of company, product, and market. |
Comprehensive Market and Economic Analysis. | Missing or very limited analysis of key factors such as market structure, demand, supply, elasticity, externalities, costs, and barriers to entry. | Superficial or incomplete analysis; lacks data and depth on multiple economic factors. | Basic analysis covering key economic factors but lacks depth or sufficient supporting data. | Good analysis of key economic factors (market structure, demand, supply, etc.) with relevant supporting data and clear explanations. | In-depth and well-integrated analysis of all relevant economic factors; excellent use of data, strong evidence, and clear application of microeconomic concepts. |
Clarity, Structure, and Organization. | Disorganized and unclear; hard to follow. | Poorly structured; ideas are difficult to follow. | Adequately organized; some parts are clear, but there are inconsistencies. | Well-organized; clear structure with logically flowing ideas. | Exceptionally clear and well-organized; ideas flow logically with strong coherence and clear headings/subheadings. |
Correct Use of Academic Citations and Referencing. | No use of academic citations; format is incorrect or missing entirely. | Limited use of academic citations; multiple errors in citation format. | Adequate use of academic citations; some errors in format or consistency. | Proper use of academic citations with minor errors in format or consistency. | Excellent and consistent use of academic citations in the correct format; all sources are properly credited and formatted according to academic standards. |
VIDEO RUBRIC:
Criteria | 0 marks | 1 mark | 2 marks | 3 marks | 4 marks |
Content and Understanding of Macroeconomic Concepts. | The video does not demonstrate an understanding of macroeconomic concepts or fails to address key findings. | The video shows limited understanding of macroeconomic concepts, with multiple inaccuracies or missing key elements. | The video presents a basic understanding of macroeconomic concepts, but explanations lack depth or clarity. | The video demonstrates a good understanding of macroeconomic indicators and concepts, with most key points clearly explained. Some broader connections or supporting details may be missing. | The video demonstrates a strong understanding of macroeconomic concepts, with clear and accurate explanations of key findings, connections to broader themes, and insightful analysis. |
Communication and Delivery. | The presentation is unclear, difficult to follow, or lacks coherence. | The presentation is hard to follow due to unclear delivery, poor pacing, or lack of engagement. | The presentation is somewhat clear but includes issues such as uneven pacing, unclear explanations, or limited group engagement. | The presentation is well-delivered, clear, and structured, though it may lack engagement or balance in group participation. | The presentation is engaging, well-paced, and clearly articulated. All group members contribute effectively, and explanations are well-structured and easy to follow. |
Creativity and Visual Appeal. | The video lacks any creative or visually engaging elements. | The video has minimal effort in creativity or visual appeal, making it unengaging. | The video includes some creative or visually appealing elements but relies mainly on basic presentation techniques. | The video incorporates creative or visually engaging elements, though they may not be fully integrated or impactful. | The video is highly creative and visually engaging, with appropriate use of visuals, graphics, or editing that enhance the explanation of macroeconomic findings. |
Adherence to Guidelines and Time Management. | The video does not meet the guidelines and significantly deviates from the time limit. | The video does not fully meet the guidelines, with major issues in timing or adherence to instructions. | The video meets most guidelines but slightly exceeds or falls short of the time limit, or has minor issues with content balance. | The video follows guidelines well, with only slight issues in time management or content balance. | The video fully adheres to guidelines, including the time limit (e.g., 3 minutes), and effectively balances content and timing. |
Brunton, F. Digital Cash. Princeton University Press, 2019. Holroyd, C.; Coates, Ken S., The Global Digital Economy: A Comparative Policy Analysis-Student Edition. Cambria Press, 2015. Huws, U., Labor in the global digital economy: The cybertariat comes of age. NYU Press, 2014. Jablonski, A.; Jablonski, M., Social Business Models in the Digital Economy. Palgrave Macmillan, 2020. Jordan, T.; The Digital Economy. Polity Press, 2020. Mankiw, G., Taylor, M., ECONOMICS, Cengage Learning EMEA, 3rd edition, 2015 As well as the main textbook, additional readings will be posted on the e-study or handed out in class. Most of these readings will consist of newspaper or magazine articles, typically from the Financial Times and the Economist, or from relevant economic blogs or institutions.
Acemoglu, D., & Robinson, J. A. (2013). Why Nations Fail. Currency. Begg, D., Dornbush, R. & Fisher, S., ECONOMICS, Ed. Mc Graw Hill. Hu, Tung-Hui, A Prehistory of the Cloud. MIT press, 2015. Øverby, H., & Audestad, J. A. (2021). Introduction to Digital Economics: Foundations, Business Models and Case Studies. Springer Nature.