The module consists of two semesters, each covering core theory and applied extensions from the main course textbook. Semester 1 starts by looking at the determination of short run equilibrium in the goods and money markets respectively, then brings them together, then brings in open economy features. Then the medium run is introduced with the labour market, and the long run with capital accumulation and technological growth. Semester 1 finishes with an application to the Crisis of 2007-2010. In semester 2, students participate in a live virtual macroeconomy, at the same time as reviewing the core theory of semester 1, before investigating extensions of this framework to a range of applied policy issues.
The core textbook has a European application, however the theory covered is mainstream, and as such, international in scope.
Many global macroeconomic events have an international flavor, and open economy macro, by definition, explores international economic interdependencies.
The study of macroeconomic growth in particular provides a logical framework within which different assumptions can be incorporated, and long-run trade-offs between environmental preservation and consumption explored.
By the end of the module, students should have acquired a suite of analytical tools and problem-solving skills that will be very useful in a wide range of careers in the government, business and finance.
Full module specification
|Module title:||Macroeconomics I|
Cannot be taken with BEE1029 or BEE1034
|Duration of module:||
Duration (weeks) - term 1: |
11Duration (weeks) - term 2:
This module aims to provide students with a basic understanding of macroeconomic theory and a toolkit for analysing modern macroeconomic issues.
ILO: Module-specific skills
- 1. explain the components of aggregate demand and supply, how they are determined, and how they affect macroeconomic performance as measured by economic growth, unemployment and inflation
- 2. explain the basis behind current theoretical controversies about how the economy works.
- 3. critically assess different policy proposals for managing the macroeconomy
ILO: Discipline-specific skills
- 4. critically analyse and evaluate a piece of economic research
- 5. explain and demonstrate an appreciation for the types of issues that economics can help address
ILO: Personal and key skills
- 6. identify the essential elements of a problem and organise a way to think about it systematically
- 7. demonstrate the ability to organise and process information through class preparation and participation
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Lectures||44||Lectures cover all ILOs|
|Tutorials||9||Tutorials are classes that solve practical exercises and include more in depth discussion|
|Virtual Macroeconomy Participation||10||During the first 5 weeks of semester 2, twice a week students will be expected to participate in a virtual macroeconomy. The time allocated to this is 1 hour on each day the economy is open, but students can log-in any time they like.|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Tutorial Questions||In class||1-7||In-class feedback|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Examination (end of Term 1)||45||2 hours||1-7||Summary written feedback and indicative answers|
|Examination (end of Term 2)||45||2 hours||1-7||Summary written feedback and indicative answers|
|Participation in a Virtual Macroeconomy||10||10 weeks||3, 5-7||Individual performance and aggregate statistics|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Exam (term 1), Exam (Term 2), Virtual Macroeconomy Coursework||Written Exam||1-7||3 hours|
The 3 hour exam will cover all the material from both semesters.
The key macroeconomic variables that will be studied are output, prices and unemployment. The mode of analysing these variables will be in terms of time-period: short-run, medium run and long run. There will also be an application of the concepts developed throughout the course to the current economic crisis.
The Short Run:
Determination of demand through consumption, investment, government spending and taxation. Determination of effective demand and the multiplier. The relationship between saving and investment. The determination of money demand and the interest rate. The interaction between fiscal and monetary policy.
The Medium Run:
How the labour market works and how wages are determined. The determination of aggregate supply and demand. The interaction between inflation and unemployment. Macroeconomics and macroeconomic policy in an open economy context. The role of exchange rates. Fiscal balance and the balance of payments.
The Long Run:
The facts of growth, and the relationship between saving, capital accumulation and economic growth. The relationship between technological change and growth.
The Current Economic Crisis:
The tools developed in the course will be used to analyse the role of fiscal policy and quantitative easing in dealing with the crisis.
The module will finish with a range of applied extensions that focus on expectations, policy-making in practice, exchange rates, monetary and fiscal policy rules, and European integration.
Indicative learning resources - Basic reading
Main Course Textbook:
Blanchard, O., Amighini, A., and Giavazzi, F., (2010); Macroeconomics: A European Perspective (BAG)
(or Blanchard, O., 2013 Macroeconomics (6th ed updated), Pearson)
Supplementary Textbook (optional):
Mankiw, G. and Taylor, M. (2007); Macroeconomics (European ed/6th ed) Worth (MT)
Note: there are many versions, including ‘International’ and ‘European’. Although the most up-to-date international or European editions will be most closely applicable to the course, you will be able to get by with older (i.e. cheaper) alternatives available on the web.
Module has an active ELE page?
Indicative learning resources - Web based and electronic resources
A Virtual Macroeconomic Environment
Last revision date