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Regular version of the site
Bachelor 2019/2020

Macroeconomics

Type: Compulsory course (Economics)
Area of studies: Economics
When: 3 year, 1, 2 module
Mode of studies: Full time
Language: English
ECTS credits: 8

Course Syllabus

Abstract

Macroeconomics is the study of economic growth and business cycles. It aims to explain observed aggregate time series for economic variables like GDP, consumption, investment, prices and wages, and the rate of unemployment. In the short run an economy experiences nominal rigidities (sticky prices and wages) and expectational errors (prices that are different from what was expected). Rigidities and expectations make nominal aggregate demand, which could fluctuate because of some shock, affect real economic activity such as output and unemployment. Therefore, it is necessary to engage in aggregate demand management in order to stabilize the economy. In the long run, economy’s output is a function of productive capacity (capital and labor inputs) as well as of economic structure (tax, education, and pension system, regulatory regime, tax structure, etc.) What policies could be used to encourage accumulation of productive factors in the long run is an important question that we will study in the course.
Learning Objectives

Learning Objectives

  • We will dive into the world of macroeconomic data and the economic blogosphere, which debates current events.
  • We will attempt to look at it from a macroeconomist’s point of view and evaluate different economic policies enacted around the world.
  • We will study such stabilization policies (fiscal and monetary) and the most efficient ways of performing them. The global financial and economic crisis of 2008–2011 and slow recovery from it is a topic that will concern us throughout the course.
  • study such stabilization policies (fiscal and monetary) and the most efficient ways of performing them
  • objective of macroeconomics is to explain the determinants of economic growth and development in the long run.
Expected Learning Outcomes

Expected Learning Outcomes

  • Understand building blocks of the AS/AD model, in closed and open economy versions. Macroeconomics is the study of economic growth and business cycles. It aims to explain observed aggregate time series for economic variables like GDP, consumption, investment, prices and wages, and the rate of unemployment. Another major objective of macroeconomics is to explain the determinants of economic growth and development in the long run.
  • Understand the principles guiding Central Bank’s monetary policy
  • Understand the propagation mechanism of the shocks hitting the economy
  • Understand the effects of foreign capital and goods markets on the propagation mechanism
  • Understand the reason for short-run stabilization policy being welfare- improving
  • Know main forms of stabilization policies (fiscal and monetary), and be able to describe their effects graphically, in closed and open economy versions.
  • Understand the main driving forces of the economy in the long run: Factor accumulation, R&D, demography. Solow model, Romer model. Know main properties of the labor market functioning.
  • Understand interaction of inflation and fiscal policy in the long run.
  • Understand the main mechanisms operating in the economy
  • Know the basic building blocks of short-run macroeconomic theory
  • Be able to describe the process of the economy’s adjustment towards equilibrium after a shock
  • Have an understanding of the monetary policy conducted under Taylor Rule
  • Be able to derive consumption and investment functions in simple settings, as well as understand the concept of the optimal monetary policy
  • Understand the need for stabilization policy, and the methods it is conducted by the government (fiscal policy) and the Central Bank (monetary policy)
Course Contents

Course Contents

  • National Income Accounting. Stylized Facts of the Macroeconomy. Growth Rate and Interest Rate Measurement.
  • Factor accumulation in the long run: Solow model
  • Ideas and technologies: Romer model, quality improvement models.Phillips Curve and Monetary Policy
  • Unemployment and Labor Market
  • IS curve
  • AD Curve
  • Stabilization Policy in the AS/AD framework
  • International macroeconomics and the Euro
  • Exchange rates, international financial system, and currency crises; Monetary policy in Open Economies
  • Great Recession and Financial Frictions
  • Introduction to DSGE Models
Assessment Elements

Assessment Elements

  • non-blocking in-class test 1
  • non-blocking in-class test 2
  • non-blocking in-class test 3
  • non-blocking class participation
  • non-blocking exam
Interim Assessment

Interim Assessment

  • Interim assessment (2 module)
    0.1 * class participation + 0.6 * exam + 0.1 * in-class test 1 + 0.1 * in-class test 2 + 0.1 * in-class test 3
Bibliography

Bibliography

Recommended Core Bibliography

  • Bénassy, J.-P. (2011). Macroeconomic Theory. New York: Oxford University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=2092514
  • Volker Böhm. (2017). Macroeconomic Theory. Springer. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.spr.sptbec.978.3.319.60149.6

Recommended Additional Bibliography

  • Farrokh K. Langdana. (2016). Macroeconomic Policy. Springer. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.spr.sptbec.978.3.319.32854.6