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HAS MCEC Macroeconomics* (Q2)

Faculty
Svend E. Hougaard Jensen
Course Coordinator
Svend E. Hougaard Jensen
Prerequisite/progression of the course
The students must document a level in English equal to TOEFL 575 and a level in mathematics equal to Danish level B.
Course content, structure and teaching
This course offers a general introduction to Macroeconomics. We ask the question, ‘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 analyse the question, ‘What is the scope for a government to stabilise 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 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
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 internationalization.
Learning Objectives
In 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.)
Type of examination, exam aids and assessment
Written 4 hours individual exam with closed books
Exam aids: For this closed books exams, students are only allowed to bring pencils/pens and a simple language dictionary. The only electronic device allowed at the exam is a non programmable calculator ( in other words, the following are NOT allowed: laptop, USB stick, mobile phone, etc).
Teaching methods
Lectures
Recommended literature
· Blanchard, O., Macroeconomics, Pearson, N.J., Latest version.
· Blanchard chap. 1 and 2: Introduction to macroeconomics
· Blanchard chap. 3: The goods market
· Blanchard chap. 4: Financial markets
· Blanchard chap. 5: The IS-LM model
· Blanchard chap. 6: The labor market
· Blanchard chap. 7: The AS-AD model
· Blanchard chap. 8: Unemployment
· Blanchard chap. 9: Inflation, activity and nominal money growth
· Blanchard chap. 18, 19, 20, and 21: The open economy
· Blanchard chap. 13: Economic growth and inequality

Last updated by The Electives Office 10/08/2009