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2010/2011 BA-2MAC Macroeconomics
| English Title | |
| Macroeconomics |
Course Information | |
| Language | English |
| Point | 7,5 ECTS (225 SAT) |
| Type | Mandatory |
| Level | Bachelor |
| Duration | One Semester |
| Course Period |
Autumn
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| Time Table | Please see course schedule at e-Campus |
| Study Board |
Study Board for Asian Study Programme |
| Course Coordinator | |
| Christian Erik Kampmann | |
| Main Category of the Course | |
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| Last updated on 29 maj 2012 | |
| Learning Objectives | |||||||||||||||
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At the end of the course the students should be able to account for: The main components of the national income accounts and aggregate statistics – what they measure and how they are related. The determinants of prices, output, unemployment, interest rates and growth in the long run. The role of money, how it is created and controlled, and what determines its supply and demand. The consequences of short-run adjustments where prices and wages move slowly, and the effects of fiscal and monetary policy (Keynesian aggregate demand model and the IS-LM model). The causes of unemployment and its relation to inflation in the short and long run (the Phillips curve). Basic macroeconomic phenomena in open economies and how the existence of trade affects macroeconomic policy. The functioning of international capital and foreign exchange markets, how they determine exchange rates in the short run, and how they interact with domestic money markets. Determinants of exchange rates, prices, and interest rates in the long run (purchase power parity theory, Fisher effect) The dynamics of exchange rate markets and exchange rate overshooting. Exchange rate regimes and the role of central banking and international monetary cooperation. How exchange rate regimes affect the scope for domestic macroeconomic policy. | |||||||||||||||
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| Examination | |||||||||||||||
| Prerequisites for Attending the Exam | |||||||||||||||
| Course Content | |||||||||||||||
Macroeconomics introduces students to economic issues and mainstream theories related to the whole national economy and the world economy. We introduce the system of national income accounts and national statistics and its use to measure the overall material standard of living, price levels, inflation, unemployment, etc. We look at how these entities are determined in the long run be capital investment, growth and innovation, and then look at the notion of money, how money is created and controlled by the Central Bank, and how the supply of money influences price levels in the long run. We consider the situation where prices and wages do not move to clear the market, how the result may overheating or recessions, and how fiscal policy (government expenditure and taxes) and monetary policy (Central bank regulation of the money market) can be used to alleviate this situation, and we consider the phenomenon and causes of unemployment and how it relates to the movement of prices and wages. We then move on to consider open economies where goods, people, and capital are traded with other countries, and how the nature of macroeconomic policy changes in an open economy. From this we move to the functioning of international capital and foreign exchange markets, and how they relate exchange rates to domestic financial markets. We consider the long-run determinants of exchange rates, inflation and interest rates between different countries and conclude the course with issues and insights related to international monetary cooperation and the particular issues raised by the needs of less developed countries. | |||||||||||||||
| Teaching Methods | |||||||||||||||
| Lectures and tutorial exercises. Lectures focus on presenting theory and insights. Tutorials focus on applying these to concrete exercises. | |||||||||||||||
| Further Information | |||||||||||||||
As an introduction to the basics of macroeconomics and international monetary systems, the course provides the economic understanding required for comparing and analyzing country-level phenomena and issues in international development in BLC and ASP studies. In particular, the course complements the course in International Economics and Competitiveness by focusing on the monetary issues in international economics. The course is offered jointly in the ASP and BLC study lines. | |||||||||||||||
| Literature | |||||||||||||||
[MT]: Mankiw, NG; Taylor, MP (2008) Economics (5th European ed.), South-Western,
ISBN 978‑1‑84880‑133‑6. (Also used in Microeconomics course) | |||||||||||||||