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Macroeconomic Theory and Policy

  • Module code: EC7004
  • Year: 2018/9
  • Level: 7
  • Credits: 30
  • Pre-requisites: None
  • Co-requisites: None

Summary

This module introduces you to macroeconomic theory and policy at an advanced level. The module first deals with the fundamental issues of demand, growth, unemployment and inflation in the context of classical and Keynesian approaches to understanding aggregate economic behaviour. The module then discusses selected issues in current economic policy and illustrates how different economic theories approach these issues, how economic models are applied to current problems and how different theories lend themselves to different policy conclusions. The topics covered will differ each semester but may well include issues such as unemployment, financial stability and the causes and effects of changes in income distribution.

Aims

  • Develop a rigorous understanding of the central ideas, concepts, areas of debate and tools of macroeconomic analysis
  • Develop the ability to employ economic models in critical discussion of macroeconomic policies and events
  • To develop students' familiarity at advanced level with the current debates surrounding two topics in economic policy
  • To apply different economic theories to specific, substantive economic issues

Learning outcomes

On successful completion of the module, students will be able to:

  • Understand classical and Keynesian approaches to output, employment and inflation at an advanced level
  • Understand, manipulate and interpret macroeconomic models
  • Demonstrate a familiarity at advanced level with the literature surrounding key topics in current debates over economic policy
  • Locate and explain, in writing, selected pieces of economic theory and data and apply them to their two topics
  • Apply different economic theories to specific, substantive economic issues

Curriculum content

  • Macroeconomic models classical; Keynesian new classical real business cycles and new Keynesian economics regarding output, inflation and unemployment
  • Open economy macroeconomics; exchange rates; monetary and fiscal policy in the open economy.
  • Economic policy money supply process; money supply and interest rate targets; fiscal policy; budget deficits
  • Determinants of unemployment
  • Efficiency and stability of financial markets
  • Economic policy in the European Union

Teaching and learning strategy

This module is delivered through workshops comprising of a combination of lecture and seminar components. Lecture component of the workshops are designed to introduce students to the key features of each topic. Students have an opportunity to demonstrate their knowledge in problem sets that apply, extend and develop further the models covered in the lectures. Seminar component of the workshops provide a forum to discuss students' work, to raise open questions and to develop models further. 

Breakdown of Teaching and Learning Hours

Definitive UNISTATS Category Indicative Description Hours
Scheduled learning and teaching Workshop 44
Scheduled learning and teaching preparation of problem sets, essays and general independent study 256
Total (number of credits x 10) 300

Assessment strategy

A selection of problem sets, policy briefs and a portfolio of essays provide formative and summative assessment, motivating and focusing students' continuous attention to the intended learning outcomes and increasing the breadth of understanding of assessed topics. Presentations will be used as formative assessment and an unseen examination will provide summative assessment of the learning outcomes.

Mapping of Learning Outcomes to Assessment Strategy (Indicative)

Learning Outcome Assessment Strategy
Understand classical and Keynesian approaches to output, employment and inflation at an advanced level Exam, problem sets
Understand, manipulate and interpret macroeconomic models Exam, problem sets
Demonstrate a familiarity at advanced level with the literature surrounding key topics in current debates over economic policy essay, policy brief
Locate and explain, in writing, selected pieces of economic theory and data and apply them to two topics Essay, policy brief
Perceive the application of different economic theories to specific, substantive economic issues Essay, policy brief, exam

Elements of Assessment

Description of Assessment Definitive UNISTATS Categories Percentage
Coursework problem sets 20
Coursework portfolio of essays 40
Written Exam Unseen examination (2 hrs) 40
Total (to equal 100%) 100%

Achieving a pass

It IS NOT a requirement that any major assessment category is passed separately in order to achieve an overall pass for the module.

Bibliography core texts

Evans, T (2009) 'Money and Finance Today', in: J. Grahl (ed): Global Finance and Social Europe. Edward Elgar

Froyen, R. (2009)  Macroeconomics, 9/E, London: Pearson Education.

Keynes, J. (1937) 'The General Theory of Employment'. Quarterly Journal of Economics 41 (2), pp. 209-223

Friedman, M. (1968) 'The Role of Monetary Policy', American Economic Review 58: pp. 1-117

Kalecki, Michal, (1943) 'Political aspects of full employment', Political Quarterly XIV, (4), pp. 322-31. Reprinted in: Kalecki, Michal, 1971. Selected Essays on the Dynamics of the Capitalist Economy. Cambridge: Cambridge University Press

Nickell, S. (1998). 'Unemployment: Questions and Some Answers', Economic Journal 108: 802-816

Shiller, Robert J. (2003) 'From efficient markets theory to behavioral finance', Journal of Economic Perspectives. 2003. 17, 1: 83-104

Malkiel, Burton G (2003). 'The efficient market hypothesis and its critics', Journal of Economic Perspectives. 17, 1; 59-82

Minsky, H, (1985) 'The Financial Instability Hypothesis: A Restatement', In: P Arestis and T Skouras (eds): Post Keynesian Economic Theory. A Challenge to Neo Classical Economics. Sussex: Wheatsheaf Books

Bibliography recommended reading

Acocella, N. (2005) Economic Policy in the Age of Globalisation. Cambridge: Cambridge University Press

Snowdon B. and Vane, H. (2009) A Macroeconomics Reader. London: Routledge

Snowdon, B, Vane, H, Wynarczyk, P, (1994) A Modern Guide to Macroeconomics: An Introduction to Competing Schools of Thought. Northampton, MA: Edward Elgar

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