• understand different models of short-run fluctuations in macroeconomics and give an account for different assumptions and predictions of the models
• understand different models of consumption, investment, and current account and give an account for different assumptions and predictions of the models
• understand and explain different empirical techniques used to test the different models
• understand and explain models of forecasting of macroeconomic fluctuations

The course consists of three parts:

First, theories of short-run fluctuations are studied. The focus is on different underlying reasons for fluctuations to be generated. The analysis of the first part suggests that the behavior of investment, consumption, and the current account is central to business cycles.

This leads to the second part of the course that focuses on determinants of consumption, investment, and the current account.

Finally, we focus on macroeconomic forecasting by studying the construction and use of an empirically based macroeconomic model. One such model could be ADAM by Statistics Denmark.

The aim of the course is to provide the students with an understanding of short-run fluctuations in macroeconomic variables, i.e., the year-to-year and quarter-to-quarter ups and downs of employment, unemployment and output. In the field Real-Business Cycle, Keynesian, and New-Keynesian theories are used to analyze business cycles founded on different sets of assumptions. The course will provide both a theoretical and an empirical angle on the topic.