Faculty
Svend E. Hougaard Jensen

Course Coordinator
Svend E. Hougaard Jensen

The students must document a level in English equal to TOEFL 575 and a level in mathematics equal to Danish level B.

This course offers a general introduction to Macroeconomics. We ask questions such as, ‘What determines production, unemployment and inflation in the short and medium run?’ To answer this, we develop an analytical framework based on equilibrium conditions in three markets: the goods market, the financial market and the labour market. This framework is also used to analyze questions like, ‘What is the scope for a government to stabilize the economy using fiscal and monetary policy?’ Finally, we briefly discuss issues related to economic growth. The focus of the course is in on the short and medium run while the long run is only briefly covered.

The following issues are addressed in the course:

· Demand for goods

· Demand for money

· Labour market

· Inflation and unemployment

· Fiscal and monetary policy

· The open economy

· Economic growth

Teaching: Lectures & workshops

At the end of this course, the students should be able to:

Explain basic macroeconomic terminology (e.g. "growth", "recession", "natural unemployment", "trade balance deficit" etc.) in a comprehensive way

Describe how real GDP is determined in the short run, the long run and the very long run.

Describe the main determinants of other important macroeconomic variables such as inflation, unemployment, real wage, interest rate, exchange rate etc.

Perform simple algebraic calculations related to developments in the main macroeconomic variables

Describe and explain the assumptions and relations of the main macroeconomic models (e.g. the IS/LM model, the AD/AS model, etc.)

Illustrate diagrammatically these models, perform policy experiments (like increasing Government Purchases or changing the Money Supply) and interpret verbally what happens when moving from one equilibrium to another

Solve algebraically simple macroeconomic models in order to determine the value of the variables in equilibrium (national income, interest rate, consumption, investment etc.)

Course aim: The purpose of the course is to give students (i) an understanding of movements in the economy over the business cycle, (ii) an understanding of economic stabilisation policy (monetary and fiscal), and (iii) an introduction to the effects on inequality of economic growth and internationalisation.

Written 4 hours individual exam with closed books, counts for 100% of the final grade.

For more details please refer to the specific conditions stated in the study rules and regulations.

Lectures

Blanchard, O., Macroeconomics, Pearson, N.J., Latest version.