This module is an intermediate module in Macroeconomics. It is a core module for students in both the Economics and Finance and Accounting and Finance programmes and is also available as an option module in other business degree programmes. The module examines the theory and policy issues associated with Macroeconomics. The theory component on each topic uses mathematical analysis and is analytical in nature. The policy component is more descriptive and applies aspects of the theory to real economy situations.
Review of Basic Macroeconomic Theory:
Circular flow of income diagram.
Aggregate demand / Aggregate supply analysis.
Income / Expenditure analysis.
The Cobb-Douglas production function.
Growth Theory:
The Solow growth model – algebra and geometry of the model that includes investment/saving, population change and technology.
Importance of technology policy for an economy.
Inflation and Unemployment:
Keynesian versus Classical approaches to both of these issues.
Quantity theory of money equation.
Linking inflation and interest rates and explaining the role of expectations.
Analysis of cyclical and structural issues associated with unemployment.
Modelling the economy in the long run:
The Classical model of the Closed economy and the Small Open Economy.
The market for loanable funds.
The markets for loanable funds and foreign exchange in the small open economy.
Case studies on changes in domestic fiscal policy and assessing their effects.
There is an emphasis on “learning by doing” i.e. the Socratic method in this module. Students are asked questions during lectures and are “encouraged” to participate. Each topic is developed from basic economic principles and, since it involves significant “block building” students are required in lectures to show both an understanding of the material developed in previous lectures and a capacity to apply this material in the further development of the topic. Students are also given problems to solve between lectures and then the students and lecturer jointly develop solutions in subsequent lectures. Part of the practical application of the theory will take the form of self-directed learning. The engagement with some prescribed research papers is a very important part of this self-directed learning. There is an examination in the first semester which test’s the participant’s ability to understand and critically evaluate these prescribed research papers.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 70 |
| Other Assessment(s) | 30 |