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BAEcon Economics and Finance / Course details

Year of entry: 2021

Course unit details:
Macroeconomics 1

Unit code ECON10241
Credit rating 10
Unit level Level 1
Teaching period(s) Semester 1
Offered by School of Social Sciences
Available as a free choice unit? Yes

Overview

To provide students with an understanding of the quantitative methods and tools that economists use and how they can be appropriately applied and interpreted. These methods and tools are used in practical and academic settings to test economic theories and measure magnitudes that are relevant for economic policy analysis and other decisions. These methods are a key element of the professional training an economist; they will provide a foundation for subsequent study of applied and quantitative topics and are useful in many careers in economics. The course aims to equip students with a number of core competencies including: (i) an awareness of the main empirical approach to economics, (ii) experience in the analysis and use of data and software packages as tools of quantitative and statistical analysis to answer topical economic questions, (iii) an understanding of the nature of uncertainty and methods of making inference in the presence of uncertainty.

The objectives of this course are that students will be able to:

•       understand the main techniques of quantitative economics and econometrics, including their strengths and limitations, at a level appropriate for an economics graduate

•       understand how these techniques can be applied to test economic theories and measure economic magnitudes, and have some knowledge of methods and results in selected areas of the applied economics literature

•       have some practical experience of the application of econometric methods based on practical exercises

•       have acquired the necessary skills and knowledge to be able to critically appraise work in the area of applied economics.

•       have a good intuitive and theoretical grasp of the dangers, pitfalls and problems encountered in doing applied modelling.

•       have the necessary background material so that they are able to go on to study more advanced and technical material in the area of econometrics.

•       use the R software package to obtain basic descriptive statistics using real world data and perform introductory econometric analysis.

 

Pre/co-requisites

ECON10241 Only available to students on BA Econ

This course unit is for BA Econ students only (anyone from another degree programme wanting it to take it should take ECON10252 in the second semester).

NOT available to students who have previously taken ECON10041/42 or ECON10081/82.

Aims

The aims of this course are:

1.     To provide a self-contained introduction to macroeconomics for general social scientists.

2.     To cover the preparatory material for more specialist courses in economics in the second and third years.

Learning outcomes

•       Demonstrate knowledge of the major macroeconomic issues, policy objectives and national accounts.

•       Understand the concept of macroeconomic modelling and how differing approaches fit into the modern debate on pluralism in macroeconomics.

•       Demonstrate a detailed understanding of the extended Keynesian income-expenditure model alongside alternative models to represent a macro-economy.

•       Understand the role of the commercial and central bank in the creation of money in the economy.

•       Use the models covered to analyze a variety of fiscal and monetary policy choices to derive basic normative implications.

•       Demonstrate critical awareness of the exchange rate and interest rate mechanism for macroeconomic policy including pathologies such as the recent financial crisis and currency wars and Brexit (2017).

Syllabus

Introducing the Macroeconomic Variables Part I:

•       Overview of Macroeconomics

•       National Income and Economic Growth: Gross Domestic Product

•       Comparing Real and Nominal GDP

•       Long Run Growth and Short Run Fluctuations in Economic Activity

 

Introducing the Macroeconomic Variables Part II:

•       Unemployment, Inflation and International Trade

•       Measuring and Understanding the Components of the Labour Market

•       The GDP Deflator and Consumer Price Measures of Inflation

•       An Introduction to International Trade

 

Macroeconomic Modelling:

•       Modelling the Macroeconomic Variables

•       Two Baseline Models and Economic Schools of Thought: The Three Markets and the Three Agents

•       The Circular Flow Model and an Overview of the Keynesian Cross and the AS/AD Model

•       Introduction to Economic Policy and a Delineation for the Schools of Economic Thought

 

Money and The Financial Markets:

•       The Definition of Money

•       The Market for Central Bank Money and Monetary Policy

•       How Money is Created and the Money Multipliers

•       The Theory of Liquidity Preference and Money Market Equilibrium

•       The Financial Markets and the Mechanics of Monetary Policy

•       An Overview of the Financial Crisis

 

The Market for Goods and Services:

•       The Interest and Exchange Rate Channels

•       Components of Gross Domestic Product and the Goods Market

•       Fiscal Policy

•       The Multiplier and the Crowding Out Effect

•       Encompassing the Open Economy

•       The Market for International Trade and the Case of Brexit (2016).

 

The Labour Market:

•       A Static View of the Labour Market

•       Equilibrium and Disequilibrium Unemployment

•       An Introduction to a Dynamic View of the Labour Market and Unemployment Duration

•       Introduction to the Phillips Curve and Expectations

 

The Aggregate Supply Aggregate Demand Model:

•       Introduction to the Aggregate Supply and Aggregate Demand Model

•       Short Run and Long Run Equilibrium in the AS/AD Model

•       Economic Policy Analysis Using the AS/AD model

•           The Financial Crisis Revisited and the State of Macroeconomics

 

Teaching and learning methods

The material is delivered via the online (Blackboard) provision of material (readings, clips) and lectures.

The learning process of students is supported by tutorials (exercise questions and discussion based questions) and the provision of further online material (such as discussion boards and practice quizzes).

Employability skills

Analytical skills
To provide a detailed and qualified economic perspective of recent and global macroeconomic events. The ability to provide critical analysis of key macroeconomic policy choices by governments and central banks.

Assessment methods

80%      Exam

20%      Timed online test

 

Feedback methods

Home Works

There will be a set of exercises in a separate folder on Blackboard which will be considered homeworks (or formative assessment). Formative assessment is ‘non’ compulsory, but highly recommended for your successful progression towards the final assessment. Students should complete their homeworks at home and then see a teaching assistant for feedback on their written attempt.

Feedback and help with the formative assessment can be obtained from your teaching assistant (TA) during their weekly feedback sessions. (please remember to take the written attempt of your homework with you).. See Blackboard for times and locations of feedback sessions.

Please be careful to take note of the period for which the feedback sessions run, normally up and until one week before the beginning of the examination period, and not during holiday periods.

 

Additional Feedback Opportunities:

After each interaction slide in the interaction lectures there will be response specific feedback given to allow you to measure your progress towards preparation for the final assessment.

Use the 10-15 minute break following lecture slots to ask questions to the lecturer on the material covered during the lecture.

Use the course twitter account @Macro1_PM to post questions about the material, course meetings and during the revision period leading up to the final assessment. The live feed for the course twitter account will also appear on Blackboard.

Recommended reading

The Textbook for this course will be:

Paul Middleditch (2018), “Introduction to Macroeconomics”, Pearson Ed. (Chapters 1 to 8)

Available in Blackwell’s Oxford Road, next to Arthur Lewis Building.

The book should provide background reading for lectures and allow students to deepen their knowledge about topics covered or discussed in the lectures.
 

Study hours

Scheduled activity hours
Assessment written exam 3
Lectures 32
Tutorials 9
Independent study hours
Independent study 56

Teaching staff

Staff member Role
Paul Middleditch Unit coordinator

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