In this course students will be introduced to the modern study and analysis of macroeconomics by considering how the microeconomic units, namely consumers and firms, make their decisions and how the their choices yield economy-wide outcomes. Following a review of consumer theory, we will study the macroeconomic theory of consumption, including the impact of various government policies on consumption behaviour. In a similar way we will introduce firms in the theoretical model. The final objective is to build a small theoretical model for the entire economy using the representative agent paradigm. This will allow students to analyse demand, supply and equilibrium in three macro markets: the aggregate goods and services market, the aggregate labour market, and the aggregate financial market. Therefore, at the end of this course, students should be able to understand how macroeconomic outcomes arise and the effects of macroeconomic policies on employment, output and prices. The use of some problem sets will also enable them to apply the concepts they have learned.
Microfoundations: consumer analysis, firm analysis
Fiscal policy
Introduction to finance theory
Monetary policy
Optimal policy analysis: the flexible price case
Optimal policy analysis: the rigid price case
Long run growth analysis
Unemployment
International macroeconomics
| Author | Title | Publisher | Year | ISBN | Note |
| Sanjay K. Chugh | Modern Macroeconomics | MIT Press | 2015 |
This course will be assessed with a written examination which will include open questions on the theory and some exercises. This exam will test for: (a) the accurate and thorough understanding of the concepts, methods, and models in the course, (b) knowledge of the major empirical regularities for aggregate economic variables, and (c) ability to use these theoretical tools and this empirical knowledge to answer macroeconomic questions.
Students who also take the optional module on Dynamic Optimization (lectured by Dr Martin Forster, a visiting professor) and submit the required coursework for this module, might obtain up to three additional marks in the final examination, based on the assessment of this coursework.
