Macroeconomic Theory

Course guarantor:

Lecturer:

Tutor:

Supervisor:

Institute of Economic Studies

Synopsis:

This course provides an integrated view of macroeconomic theory by presenting an underlying model developed around the goods market, financial market, and labor market, as opposed to being a collection of different macroeconomic models. It also distinguishes separately the short run, medium run, and long run and extends on the role of expectations and open economy specifics. This is thanks to the coherent approach by Blanchard (2021) in his textbook adopted for this course. The current macroeconomic events are also covered, starting from the major economic crisis in the late 2000s to monetary policy in the US, problems in the Euro area, and growth in China. This course has only lectures, no seminars.

Requirements:

Midterm and non-cumulative final exams count for 40% each of grade. Attendance at lectures contributes to the remaining 20%. Students have a chance to improve their grades by earning additional points through active in-class participation in a form of answering spontaneous questions within a theme addressed by the lecturer.

Syllabus of lectures:

The short run

Goods and financial markets

The IS-LM model

The medium run

Labor market and the Phillips curve

The IS-LM-PC model

The long run

The facts of growth and aggregate production function

Saving, capital accumulation, and output

Technological progress and the challenges of growth

Expectations

Expectations, consumption, and investment

Expectations, output, and policy

The open economy

The Mundell-Fleming model and Trilemma

Exchange rate regimes

Syllabus of tutorials:

Study Objective:

The goal is to enable students to analyze not only past macroeconomic events but also those that unfold in the future by understanding mechanisms in the tractable macroeconomic model, which in turn suggests certain implications for public policy.

Study materials:

1) Blanchard, O. (2021). Macroeconomics. England, Harlow: Pearson Education, 1-539.

2) Dornbusch, R., Fischer, S., & Startz, R. (2014). Macroeconomics. New York: McGraw-Hill Education, 1-652.

3) Mankiw, G. (2019). Macroeconomics. New York: Macmillan International Higher Education, 1-612.

Note:

Economies, like people, get sick high unemployment, recessions, financial crises, low growth. Macroeconomics is about why it happens, and what can be done about it. (Olivier Blanchard, 2021).

Further information:

No time-table has been prepared for this course

The course is a part of the following study plans: