EC304 Principles of Economics (or equivalent), EC305/EC306 Mathematics for Economics Mode A or B, EC309 Statistics for Economics, or equivalent
OverviewMacroeconomics today is a different subject than it was just a few decades ago. Old controversies have been resolved and new ones have arisen. This module builds on the first year teaching of macroeconomics to provide an intermediate course, which takes full account of the policy issues and controversies in the world macroeconomy.
Autumn Term begins by looking at the basic methodology of macroeconomic models. We then examine, in greater detail than at Stage 1, how the macroeconomic theories of aggregate demand and aggregate supply are derived. This involves studying the markets on which these theories are based. It is important to be aware that there are many theories of aggregate demand and supply. In the autumn term we use the IS-LM model, with which you should be familiar from Stage 1, to derive a theory of aggregate demand in both open and closed economies. We also examine the labour market to derive a theory of aggregate supply and study the relationship between inflation and unemployment.
Spring term starts with studying the long-run, that is, what determines the standard of living of countries in the long term, as opposed to short-run economic fluctuations. We then study microeconomic fundamentals of macroeconomics to understand in-depth the determinants of consumption, investment, and labour supply decisions. We then use these and the ideas developed in the autumn term to extensively examine macroeconomic demand management policies (fiscal and monetary) and their shortcomings. We finally study the role of the financial system in the macroeconomy and the causes behind some financial crises with special focus on the 2008/09 global financial crisis.
This module appears in:
Method of assessment
20% In Course Test (2 x 10%)
80% Examination (3 hours)
M Burda and C Wyplosz, Macroeconomics (5th or 6th ed), Oxford University Press, 2009 or 2013
Burda and Wyplosz online resources site http://www.oup.com/uk/orc/bin/9780199264964/
G Chamberlin and L Yueh, Macroeconomics, Thomson, 2006
By the end of the academic year, you are expected to:
be able to understand, analyse and critically assess the current macroeconomic problems widely addressed in the media such as unemployment, inflation, macroeconomic policy and exchange rate volatility
be able to form your own economic view on current macroeconomic problems
understand the interrelationships between different macroeconomic policies
build a solid economic background which will enable you to start a career as a macroeconomist
be able to present macroeconomic analysis both verbally and in written form
be able to construct and write answers to macroeconomic analytical questions
be able to undertake further study in the different areas of macroeconomics such as international finance, monetary economics and growth theory.