Macroeconomics: Theory and Policy Applications

Wedi cwblhau'r modiwl dylai'r myfyrwyr fedru:

1. Evaluate how variables relate to each other in macroeconomic models, and apply these models to explain real world economic problems and issues.
2. Analyze factors that contribute to short-run fluctuations in aggregate demand, and explain the implications for macroeconomic aggregates such as consumption, investment, income, and employment.
3. Assess the role and functions of the central bank and the treasury and the various constraints they face in stimulating economic activity.
4. Critically analyze the impact of fiscal and monetary policies on other macroeconomic variables such as interest rates, investment, exchange rates, trade balance, balance of payments, output, and employment.
5. Distinguish between alternative theories of long run economic growth and critically analyze their claims about the main sources of long run economic growth.

This module provides a thorough grounding in aggregate economic behavior at an intermediate level. In particular, the module focuses on the theoretical explanations of how the macroeconomy works, as well as relevant policy issues. The first part looks at the economy in long and the short run. The classical theory is introduced, and the IS/LM model of the economy in the short-run is developed. Stabilization policy and constraints in implementing fiscal and monetary policy are introduced. The second part focuses on the open economy, using the Mundell-Fleming model to examine how monetary and fiscal policies affect the economy under fixed and floating exchange rate regimes. The Solow model of long-run growth, and the endogenous growth model, are introduced.

CLOSED ECONOMY MODELS
• Introduction to macroeconomics, and macroeconomic data
• National accounting: Determinants of income, distribution of income to production factors, consumption , investment, equilibrium in the market for goods and services
• Money and inflation: Functions of money, the role of banks, the Quantity Theory of Money, demand for money, inflation.
• The IS LM model
• Aggregate Demand and Aggregate Supply
• Stabilization policy: Rules versus discretion, the time inconsistency problem, Central Bank Interdependence.

OPEN ECONOMY MODELS AND LONG RUN GROWTH
• The open economy: International flows of capital and goods, savings and investment in a small open economy, exchange rates determination.
• The Mundell-Fleming model, fixed versus floating exchange rate regimes, monetary and fiscal policies.
• Long-run economic growth: The Solow model and the endogenous growth model

Mae'r modiwl hwn yn cydymffurfio a FfCChC Lefel 5