Course Information Undergraduate prospectus

Macroeconomics I (2000)

Course summary

Course code: ECON1008
Level: 4
Credits: 30
School: Business Faculty
Department: International Bus and Economics
Course Coordinator(s): Maria Cagliesi

Specification

Aims

This is an introductory level core course in macroeconomics for those expecting to take further courses
in economics. It provides a theoretical and applied approach of introductory macroeconomics, with an
international perspective and applications to account for the growing importance of the global economy
and the rising openness of economies.
The course covers critical issues such as macroeconomic stabilization, distributional equity,
environmental considerations, and the adequacy of living standards and, while laying down the
foundations of the core principles of economic theory and analysis, it contextualises the relevance,
applicability and limitations of theories providing a pluralistic view from the macroeconomic
perspectives.
The course offers abundance of current real‐world examples and applications to make theoretical
exposition close to experience. Topics will be treated from a theoretical, mathematical and applied
standpoint. The contextualisation will recognise the centrality of three current compelling goals of
macroeconomics: (1) improvements in living standards, (2) stability and (3) financial, social, and
ecological sustainability, relating them to globalization, inequality, the Great Recession and its
aftermath. The ultimate objectives are to bridge theoretical and factual knowledge of current
economic issues and to gain an understanding of real world events, of macroeconomic policies and of
their effects on business and organizations.

Learning outcomes

On successful completion of this course a student will be able to:
Learning
Outcome
1
Explain and understand the context of economic analysis: economic activities,
interactions across agents, markets and countries in generating distributing and using
resources
2 Gain knowledge of methodology and tools of economic analysis, to use macroeconomic
measurements (the current approach and the environmental and social dimensions)
and to identify the interaction of economics with other social sciences.
3 Gain clear insights of different theories, and analytical methods in macroeconomics,
and become aware of the importance of the model‐based approach to study
macroeconomic issues such as business cycles, unemployment, inflation, deficit and
debts, excess of international borrowing and lending, inequality.
4 Contextualise and apply economic theories to real world factual evidence and current
policy issues (such as: financial‐social‐environmental sustainability issues) and to use
quantitative methods and computing techniques relevant to the study of economics
5 Distinguish between and evaluate fiscal and monetary policies, explain competently the
causes and effects of globalization for consumers, firms and national economies and
identify major institutions promoting global trade and development
6 Handle and interpret data relevant to the study of economics in the context of
international markets.

Indicative content

The course will cover theory, applications and policies.
a) PART ONE :THE CONTEXT FOR ECONOMIC ANALYSIS
Introduction
 The way of thinking in economics. Central ideas: choices, incentives, trade‐offs, opportunity
costs, the forces of demand, supply and equilibrium, the role of markets
 Instruments, tools and methodology in macroeconomics: graphs, equations, models
 Macroeconomics in context: 1) Introducing the Four Essential Economic Activities. 2) Resource
Maintenance: Attending to the Asset Base of the Macroeconomy. 3) Distribution: Who Gets
What, and How? 4)The Three Spheres of Economic Activity
b) PART TWO : MACROECONOMIC BASICS
Macroeconomic Accounting: measuring the economy
 The concept of national income and its relationship to economic welfare. Differences between
national and domestic product and the growing roles of multinationals
 The circular flow of income and the growing openness of economies
 A broader view of national income accounts
 Why GDP is not a measure of well‐being
 Alternative approaches to representing and measuring economic well‐being
Macroeconomic Concepts and main Issues: (historical trends and global comparisons)
 Use economic tools to explain and measure issue in today’s world:
 Business cycle: international comparisons and applications
 Unemployment, migration flows: international comparisons and applications
 Inflation: international comparison and applications
 Trade and foreign direct investments: effects on business decisions
 Accounting for the environment
 Causes, effects of globalization
 Inequality
c) PART THREE: MACROECONOMIC THEORY AND POLICIES
Aggregate Demand and Economic Fluctuations
 The Business Cycle
 Macroeconomic modelling and Aggregate Demand
 The Keynesian Model
 Fiscal policy
 The role of government spending and Taxes
 Money, banking, and finance: the nature of money, the banking system, money and finance
 The theory of money, interest rates, and Aggregate Demand
 Monetary policies in practice
 Complications and policy controversies
 Bond prices and interest Rates
 Short vs. Long Run and real vs. nominal interest rates
The Global Economy and Policy
 Macroeconomics in a global context
 The trade balance and International borrowing/lending.
 Macroeconomics in an Open Economy
Aggregate Supply, Aggregate Demand, and Inflation: Putting It All Together
 Employment and unemployment : a closer look at unemployment
 Theories of employment, unemployment, and wages
 Capacity, productivity and the aggregate supply curve
 Putting the AD/AS Model to work: equilibrium and perturbations
 Theories of inflation
 The Phillip Curve
Competing Theories
 More Schools of Macroeconomics
 New Classical Economics
 The Classical‐Keynesian Synthesis and New Keynesian Macroeconomics
 Post‐Keynesian Macroeconomics
PART FOUR: MACROECONOMIC ISSUES AND APPLICATIONS
 The financial crisis and the Great Recession: economic impacts of the crisis; underlying causes of
the financial crisis
 deficits and debt : deficits and the national debt ; The debt and its links to finance; The twin
deficits hypothesis; Political economy of the debt
 How economies grow and develop : development and economic growth; Countries’ growth
experiences; Understanding poverty and inequality
 Growth and sustainability in the 21st Century : Macroeconomics and ecological sustainability;
Economic growth and the environment

Teaching and learning activity

Lectures and tutorials. Lectures will be devoted to the introduction of the relevant models of
modern macroeconomics and microeconomics, to the discussion of ground‐breaking
research findings of the past decade and their applications. Seminars will be focused on
presenting and reviewing specific topics and articles, on problem solving, group work, data
and case study analysis.
 Lectures (two hour weekly): Lecture will start by contextualizing economic concepts and
theories by using specialist readings on current debates of important economic events,
policy decisions occurred during the week, linked to the theoretical material to be developed
during the academic year. The readings will be taken from the most accredited economic
source, such as the Financial Time (F.T.) and the Economists. This exercise aims at fostering
class debate, bridging theory and practice so as to provide ideas for future dissertation
topics.
 Tutorials: These activities range from searching of on line material (such as journal articles,
speeches, on line exercises), problem solving exercise using on line or other sources, group
discussions. The aim of these sessions is to stimulate interactive learning activities. Students
will be asked to solve exercises and to engage in discussions. They will also be introduced to
simulation exercises. Group tutorials are intended also to provide opportunities to practice
effective communication skills (both oral and writing) by explaining theoretical concepts

Assessment

Portfolio: 50%
4000 words.
Outcome - Problem sets: 1,2,4, and 6 Patchwork 1, 3, 4, 5, and 6
Problem sets are online exercises to assess engagement during the year and to work on
feedback to improve performance during terms. The integrated patchwork is a series of tasks and activities built
around a theme to be developed by integrating different perspective and approaches.

Examination: 50%
Outcome 1,2,3
4500 Words
Closed book exam built around learning outcomes.

Pass Mark 40%