To provide students with an understanding of the main macroeconomic forces at work in a modern economy, the theories that seek to explain these forces, and the ability to interpret economic trends and participate in policy debate.
1. Measuring a Nation´s Income (Chapter 23). The circular flow of income and Gross Domestic Product (GDP).
2. Measuring the Cost of Living (Chapter 24). The consumer price index and GDP deflator, and the difference between real and nominal economic variables.
3. Production and Growth (Chapter 25). The determinants of long-run economic growth: capital accumulation, population growth and productivity.
4. Saving, Investment, and the Financial System (Chapter 26). The relationship between saving and investment, the role of the interest rate in bringing supply and demand for loanable funds into equilibrium. Public versus private saving.
5. The Basic Tools of Finance (Chapter 27). Highlights only.
6. Employment and Unemployment (Chapter 28). Highlights only
7. The Monetary System (Chapter 29). The function of money, defining money, the money supply, the role of the central bank and commercial banks in money creation.
8. Money growth and Inflation (Chapter 30). The long-run neutrality of money, printing money, inflation as a tax, costs of inflation.
9. Open-Economy Macroeconomics: Basic Concepts (Chapter 31). Trade balances, international investment flows, exchange rates, purchasing power parity.
10. Keynesian theory (Chapter 33). The Keynesian cross, multiplier effect, and IS-LM model.
11. Aggregate Demand and Aggregate Supply (Chapter 34). Explaining short-run fluctuations in economic activity: booms and recessions.
12. The Influence of Monetary and Fiscal Policy on Aggregate Demand (Chapter 35). A government´s policy options.
13. The Short-Run Trade-Off between Inflation and Unemployment (Chapter 36). The Philips curve. Highlights only.
The course will follow closely the structure set out in the main textbook, Economics, by Mankiw, N. Gregory and Taylor, Mark P. (This is the European edition of Principles of Economics, by N. Gregory Mankiw). We will aim to cover the main material in chapters 23 to 36 of this book, and selected material from chapters 37 and 39).
Weekly homework will test students´ knowledge of the material covered in the lectures. The students will also prepare and present in class a macroeconomic assessment of a country of their choice.
Continuous Assessment:
Attendance, participation and course project 30% (10% +5%+15%)
Mid-term exam 40%
Final exam 30%
Retake policy: students who fail the course (weighted average grade <5) can sit a retake exam which retests all the material covered in the course. The students´ course grade will then be the weighted average of the retake grade (70%) and the student´s original grade for the course projects, attendance and participation (30%).
Readings:
As well as the main textbook, additional readings will be posted on the e-study or handed out in class. Most of these readings will consist of newspaper or magazine articles, typically from the Financial Times and the Economist, or from relevant economic blogs or institutions.
Recommended Textbooks:
Mankiw, N. Gregory and Taylor, Mark P., ECONOMICS, 2nd edition, Cengage Learning EMEA
(The US edition of the this book is: Mankiw, N. Gregory, PRINCIPLES OF ECONOMICS, South Western)
Begg, D., Dornbush, R. & Fisher, S., ECONOMICS, Ed. Mc Graw Hill.