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BAEcon Economics and Finance

Year of entry: 2021

Course unit details:
Advanced Macroeconomics

Unit code ECON30002
Credit rating 20
Unit level Level 3
Teaching period(s) Semester 2
Offered by Economics
Available as a free choice unit? No

Overview

See course Blackboard pages.

Pre/co-requisites

Unit title Unit code Requirement type Description
Adv Maths - BAEcon & BSc Econ ECON10071 Pre-Requisite Compulsory
Mathematical Economics I ECON20120 Pre-Requisite Compulsory
Macroeconomics IIIA ECON30611 Pre-Requisite Compulsory
Macroeconomics IIIB ECON30612 Co-Requisite Compulsory
Macroeconomic Analysis 4 ECON20532 Co-Requisite Compulsory
Advanced Mathematics ECON20071 Pre-Requisite Compulsory
Macroeconomics 4 ECON20032 Pre-Requisite Compulsory
(ECON20532 or ECON20032) and (ECON10071 or ECON20071)

(ECON20532 Macro Analysis 4 or ECON20032 Macro 4) and (ECON10071 Adv Maths or ECON20071 Adv Maths)

Aims

The course focuses on the role of modern theories of economic growth and state of the art theories of monetary policy. These elements have been increasingly recognized in recent years as playing a key role in shaping macroeconomic outcomes in the long run (Economic Growth) and in the short run (Monetary policy) determining the effects of economic policies.

In the first part of the course (long run analysis), the aim will be to give students an overview of the main theories of economic growth, starting from the general equilibrium neoclassical growth model, then the endogenous growth model and the Schumpeterian growth model.

In the second part of the course (short run analysis), the course will focus instead on the New Keynesian model and various extension of monetary models.

Learning outcomes

Students should be able to:

  • master the main equilibrium concepts of economic growth.
  • work with a saddle path graph.
  • know long run policy implications of fiscal policies.
  • understand the main mechanisms behind a monetary model.
  • solve for the short and long term general equilibrium.
  • solve for the optimal policy under discretion and commitment.

Syllabus

Brief overview of the syllabus/topics:

  1. Introduction. The Neoclassical Growth Model. The Ramsey Model;
  2. The Endogenous Growth Model;
  3. Income differences among countries;
  4. The Real Business Cycle Model;
  5. The Basic New Keynesian Model;
  6. Monetary Policy Design in the New Keynesian Model;
  7. Monetary Policy Trade-offs: Discretion Vs Commitment;
  8. Revision Class

Textbooks:

  1. Advanced Macroeconomics, David Romer fourth Edition;
  2. Monetary Policy, Inflation and the Business Cycle, Jordi Galí, Second Edition.

Additional reading (book chapters, blogs, and journal articles) will be provided through Blackboard

Teaching and learning methods

Lectures and exercise classes.

Intellectual skills

Intellectual skills: (i) problem-solving skills; (ii) skills of analysis, and the application of analytical models; (iii) the evaluation and critical analysis of arguments, theories and policies; (iv) synthesise and evaluate data

Practical skills

Practical skills: (i) independently locate and assess relevant literature, and to draw on these to develop understanding and to construct arguments.

Transferable skills and personal qualities

Transferable skills and personal qualities: (i) select and deploy relevant information; (ii) communicate ideas and arguments in writing; (iii) apply skills of analysis and interpretation; (iv) manage time and work to deadlines; (v) use ICT to locate, analyse, organise and communicate information (e.g. internet, on-line databases, search engines, library catalogues, spreadsheets, specialist programs, word processing and presentation software).

Employability skills

Analytical skills
Problem solving
Other
Information retrieval. Presentation. Numeracy. Literacy.

Assessment methods

30%                  Mid term exam

70%                  Final Exam

 

Feedback methods

  • Tutorials.
  • Office hours.
  • Revision sessions.
  • Discussion boards.

Recommended reading

No single textbook covers the material required in this module. We will be mainly using journal articles and papers, available through the Library or posted on Backboard. Lecture notes will also be provided.

Besides the specific (compulsory) readings listed for each class (see above), additional non-compulsory (but very interesting) readings are:

Books:

      Evans, G.W., Honkapohja, S., 2001. Learning and Expectations in Macroeconomics. Princeton University Press.

      Farmer, R.E., 1993. The Macroeconomics of Self-Fulfilling Prophecies. MIT Press, Cambridge, MA.

      Sargent, Thomas, 1999. The Conquest of American Inflation. Princeton University Press, Princeton.

      Veldkamp, L., 2001. Information choice in macroeconomics and finance. Princeton University Press.

Study hours

Independent study hours
Independent study 0

Teaching staff

Staff member Role
Raffaele Rossi Unit coordinator

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