Economics

Course guarantor:

Lecturer:

Tutor:

Supervisor:

Institute of Economic Studies

Synopsis:

This course combines selected topics from macroeconomics and microeconomics to give an outline of the main principles in economics working at a country, household, and firm level. In general, countries are governed to maximize welfare of their population by maintaining low inflation, high employment, and stabilizing short-run economic fluctuations. Households maximize their utility by consuming goods and supplying labor to firms. Firms maximize their profit by producing goods and demanding labor from households. The Macro section of this Economics course, therefore, provides an integrated view of macroeconomic theory by presenting an underlying model developed around a country's goods market, financial market, and labor market. It distinguishes the short-run and medium-run horizons by extending the baseline closed-economy setting with the open-economy specifics. In the long run, the Solow model as a fundamental economic growth framework is also covered. The Macro section is taught by Aliya Algozhina every week with no exercise sessions. The Micro section of this course focuses on consumption theory of a household, individual demand function, labor supply, theory of a firm, demand for inputs, cost minimization and profit maximization, perfect competition, monopoly, oligopoly, risk and uncertainty. This is taught by Petr Makovský every week with an exercise session every two weeks.

Requirements:

Each section has its own midterm and/or final written exams and contributes to 50% of a grade. Attendance at lectures is expected to pass successfully the course. Each lecturer at their first class provides more details about their assessment. The final grade is given after summing up all points from both the Macro and Micro sections of this course.

Syllabus of lectures:

Macroeconomics section

Aggregate output (GDP), unemployment, and inflation

Goods and financial markets in a closed economy

The IS-LM model in the short run

Labor market and the Phillips curve in the medium run

The IS-LM-Phillips curve model

The facts of long run growth and the Solow model

Technological progress and the challenges of growth

Openness in goods and financial markets

The Mundell-Fleming model, Policy Trilemma, and exchange rate regimes

Microeconomics section

Optimal consumption choice theory

Individual demand function

Theory of the firm: technology choice, costs, revenues, and profit

Cost minimization, profit maximization

Perfect competition, monopoly, and oligopoly

Input market analysis, demand for inputs

Labor supply

Consumer and firm risk and uncertainty

Financial capital, market and government failures, asymmetric information

Syllabus of tutorials:

Study Objective:

The goal is to enable students to analyze the rational behavior of households, firms, and not only past macroeconomic events but also those that unfold in the future by understanding the mechanisms behind aggregate relationships.

Study materials:

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

Mankiw, G. (2022). Macroeconomics. New York: Worth Publishers, 11th edition, 1-557.

Nicholson, W., & Snyder, C. M. (2014). Intermediate Microeconomics and its Applications. Cengage Learning, 1-648.

Note:

Further information:

No time-table has been prepared for this course

The course is a part of the following study plans: