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2019/2020  BA-BHAAI1022U  Principles of Macroeconomics

English Title
Principles of Macroeconomics

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Bachelor
Duration Summer
Start time of the course Summer
Timetable Course schedule will be posted at calendar.cbs.dk
Max. participants 120
Study board
Study Board for BSc in Economics and Business Administration
Course coordinator
  • Course instructor: Bradley K. Hobbs, Clinical Professor of Economics. Clemson University.
    Sven Bislev - Department of Management, Society and Communication (MSC)
For academic questions related to the course, please contact instructor Bradley K. Hobbs at hobbs4@clemson.edu
Other academic questions: contact academic director Sven Bislev at sb.msc@cbs.dk
Main academic disciplines
  • Economics
Teaching methods
  • Face-to-face teaching
Last updated on 12/11/2019

Relevant links

Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • Fully explain the basic concepts, models, theories and tools used in this macroeconomics course and use them to analyze economic decisions by individuals and by firms.
  • Explain how and what we measure economics aggregates. Explain why economics focuses on economic growth and develop models that help us to understand what factors aid in economics growth. Explain why we care about growth and how knowledge of personal finance and stock markets can lead to growth in aggregate and individual wealth.
  • Predict the typical general effects of the business cycle on inflation and unemployment. Display clear knowledge of the correct countercyclical monetary and fiscal policies in an economic contraction and an economic expansion.
  • Articulate and explain the origins, workings, and potential problems in monetary systems.
  • Analyze economic outcomes in terms of their effects on aggregate income and income distribution.
  • Be able to outline the major themes of international trade and international finance in an economic analytical framework.
Course prerequisites
None
Examination
Principles of Macroeconomics:
Exam ECTS 7.5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Summer, Ordinary exam: 4 hour written exam in the period of 27–31 July 2020
Retake exam: 4 hour written exams in the period of 28 September–2 October 2020
3rd attempt (2nd retake) exam: 72-hour home assignment- 23-26 November 2020 – for all ISUP courses simultaneously

Exam schedules available on https:/​/​www.cbs.dk/​uddannelse/​international-summer-university-programme-isup/​courses-and-exams
Aids Closed book: no aids
However, at all written sit-in exams the student has access to the basic IT application package (Microsoft Office (minus Excel), digital pen and paper, 7-zip file manager, Adobe Acrobat, Texlive, VLC player, Windows Media Player), and the student is allowed to bring simple writing and drawing utensils (non-digital). PLEASE NOTE: Students are not allowed to communicate with others during the exam.
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Retake exam: 4 hour written sit-in exam, new exam question
Exam form for 3rd attempt (2nd retake): 72-hour home project assignment, max. 10 pages.
Course content, structure and pedagogical approach
The Principles of Macroeconomics is the introductory, foundational course that gives students a comprehensive overview of macroeconomic theory. It provides the framework for subsequent intermediate macroeconomic theory courses and is any student's introduction to the analysis of economies at the aggregated (national or state) level.
 
Macroeconomics is the study of the behavior of an entire economy aggregated across all of the individual decision-making units. It deals primarily with those factors affecting production, employment, and price levels. Topics which we will cover include: economic growth, business cycles, the national debt, interest rates, government spending, the measurement of economic aggregates, monetary policy, and fiscal policy. We will also introduce international economics and policies along with international finance. 
 
There is relatively-wide agreement on the goals of macroeconomic policy: growth in real output, full employment, and price stability. However, macroeconomic theory is marked by diverse perspectives concerning the appropriate policy actions required to achieve these goals. A number of alternative schools of thought exist including Keynesianism, Monetarism, and Rational Expectations. Each stresses different paths and perspectives on the proper path(s) to achieving the goals of macroeconomic success.
 
Students are encouraged to follow the economic and financial news over the period of the course – the course will provide the background necessary for formulating informed opinions on the workings of a macroeconomy.
 
The primary focus of this course is on the development of analytical prowess or "critical thinking." The discipline of economics originated within philosophy, rhetoric, logic and mathematics and transitioned through political economy in the 19th century into modern economics.  As a result, economics is a very broad social science drawing upon the interconnectedness of human action. We model human behaviors within particular institutional arrangements.
 
This course focuses on the macroeconomy including government policies designed to influence, direct, and coordinate economics behavior.  The two major categories of policies covered here are fiscal policy and monetary policy.  We will address how we recognize the business cycle, why we may want to use policy to adjust that cycle, and what polices would be called from in both the fiscal and monetary policy actions spheres. We will also develop an understanding of the monetary system. 
 
Preliminary assignment:
1) Read the first four chapters of the textbook and prepare questions to discuss in our first week of class meetings.
(2) Carefully read this article: Radford, R.A. 1945. “The Economic Organisation of a P.O.W. Camp.” Economica, 12(48): 189-201.  Be prepared to participate in the discussion in the first class. Prepare written answers to the study guide questions.
(3)  Carefully read this article: Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic Review, 35(4): 519–30. Be prepared to participate in the discussion in the fourth class. Prepare written answers to the study guide questions.
 
Class 1 Introduction
1. The Big Ideas in Economics
2. The Power of Trade and Comparative Advantage
 
Class 2  Supply and Demand, Price Controls
3. Supply and Demand
4. Equilibrium: How Supply and Demand Determine Prices
5. Price Ceilings and Price Floors
 
Class 3 Economic Growth, National Income Accounting
6. GDP and The Measurement of Progress
7. The Wealth of Nations and Economic Growth
Appendix: The Magic of Compound Growth: Using a Spreadsheet
Preliminary Assignment due
 
Class 4 Economic Growth and Productivity
8. Growth, Capital Accumulation and the Economics of Ideas: Catching Up vs. The Cutting Edge
Appendix: Excellent Growth
9. Savings, Investment, and the Financial System
Appendix: Bond Pricing and Arbitrage
 
Class 5 Personal Finance, Political Economy and Public Choice
10. Stock Markets and Personal Finance
21. Political Economy and Public Choice
 
NOTE:
The Optional Midterm Assignment below opens at the beginning of Week 5 on CANVAS.
 
Class 6 Business Fluctuations, Employment, Money, and Inflation
11. Unemployment and Labor Force Participation
12. Inflation and the Quantity Theory of Money
 
Optional Feedback Activity - Mid-term Assignment
The optional mid-term assignment will be a take-home examination covering course materials up to that point and will be similar to the final examination. Its format will be multiple choice and short answer. It will be posted on Canvas a week prior to its due date - the beginning of Class Meeting 5. This midterm is best viewed as learning opportunity for students. I encourage you, and you have my explicit permission, to work with a classmate or small team. Ideally, you will learn from one another. Midterm questions are drawn from the test bank which is a supplement to your textbook. Space will be provided for you to do your analysis on the examination.
 
Class 7 Business Fluctuations, Aggregate Demand and Aggregate Supply, Transmission of Policy
13. Business Fluctuations: Aggregate Demand and Supply
14. Transmission and Amplification Mechanisms
 
Class 8 Macroeconomic Policy and Institutions - Monetary Policy and the Fed
15. The Federal Reserve System and Open Market Operations
Appendix: The Money Multiplier Process in Detail
16. Monetary Policy
 
Class 9 Macroeconomic Policy and Institutions - Fiscal Policy and Congress
17. The Federal Budget: Taxes and Spending
18. Fiscal Policy
 
Class 10 International Economics - Trade, Finance, and Exchange Rates
19. International Trade
20. International Finance
 
Class 11 Comprehensive Review

 

Description of the teaching methods
Lecture
Feedback during the teaching period
Optional Feedback Activity - Mid-term Assignment
The optional mid-term assignment will be a take-home examination covering course materials up to that point and will be similar to the final examination. Its format will be multiple choice and short answer. It will be posted on Canvas a week prior to its due date - the beginning of Class Meeting 5. This midterm is best viewed as learning opportunity for students. I encourage you, and you have my explicit permission, to work with a classmate or small team. Ideally, you will learn from one another. Midterm questions are drawn from the test bank which is a supplement to your textbook. Space will be provided for you to do your analysis on the examination.
Student workload
Preliminary assignment 20 hours
Classroom attendance 33 hours
Preparation 126 hours
Feedback activity 7 hours
Examination 20 hours
Further Information

Preliminary Assignment: To help students get maximum value from ISUP courses, instructors provide a reading or a small number of readings or video clips to be read or viewed before the start of classes with a related task scheduled for class 1 in order to 'jump-start' the learning process.

 

Course timetable is available on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams

 

We reserve the right to cancel the course if we do not get enough applications. This will be communicated on https://www.cbs.dk/uddannelse/international-summer-university-programme-isup/courses-and-exams end March 2020.

 

 

 

Expected literature

Mandatory readings:

 

Tyler Cowen and Alex Tabarrok, Modern Principles: Macroeconomics. Worth Publishing, 4th Edition. ISBN-33: 978-1319182069 or ISBN-10: 1319182062
 
Radford, R.A. 1945. “The Economic Organisation of a P.O.W. Camp.” Economica, 12(48): 189-201.
 
Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic Review, 35(4): 519 -30.
 
Tyler, Cowen and Alex Tabarrok. Modern Principles of Macroeconomics, 4th Edition.
Indicated chapters. 
 
Last updated on 12/11/2019