Module Information

Module Identifier
AB23220
Module Title
Macroeconomics: Theory and Policy Applications
Academic Year
2020/2021
Co-ordinator
Semester
Semester 2
Pre-Requisite
Reading List
Other Staff

Course Delivery

 

Assessment

Due to Covid-19 students should refer to the module Blackboard pages for assessment details

Assessment Type Assessment length / details Proportion
Semester Exam 3 Hours   70%
Semester Assessment Essay  (2,000 words)  30%
Supplementary Exam 3 Hours   70%
Supplementary Assessment Essay  (2,000 words)  30%

Learning Outcomes

On successful completion of this module students should be able to:

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.

Brief description

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.

Content

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 ann the endogenous growth model

Module Skills

Skills Type Skills details
Application of Number Numerical problems and data analysis will be treated in tutorial exercises, appropriate assignments, and examination questions
Communication Interactive discussion-based tutorials facilitate independent and critical thinking about macroeconomic issues, which helps to develop presentation skills. Assessed coursework helps to develop writing skills which will be of use when writing various reports
Improving own Learning and Performance Students will improve their learning by undertaking directed but independent study and work. Time management will be crucial in preparation for the assessments.
Information Technology The use of electronic journals is highly relevant for the successful preparation of the coursework
Personal Development and Career planning The module helps students to develop various personal and interpersonal skills.
Problem solving By introducing variety of intermediate topics in macroeconomics, the module enables students to develop creative thinking approaches in solving challenging macroeconomic problems.
Research skills The content will introduce the students to a range of research methods, which will facilitate development of appropriate research skills necessary to produce essays and analytical reports.
Subject Specific Skills Students will be able to apply economic models and think critically in discussing macroeconomic problems and policies.
Team work Team work will be encouraged in seminar discussions

Notes

This module is at CQFW Level 5