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BAEcon Economics and Finance / Course details
Year of entry: 2021
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Course unit details:
|Unit level||Level 1|
|Teaching period(s)||Semester 2|
|Offered by||School of Social Sciences|
|Available as a free choice unit?||Yes|
This course provides an introduction to long run macroeconomic issues such as why some countries so much poorer than other, what drives savings, investment and innovation in the long run. In addition, we will also study the factors that determine unemployment and inflation in the long run. The course keeps a tight connection between economic models and data as it is the feature of modern macroeconomics. To analyse the macroeconomy, we must analyse current data and real-world situations, then apply this knowledge using models and equations. The course provides the necessary tools to analyse long run macroeconomic questions.
|Unit title||Unit code||Requirement type||Description|
(ECON10241 Macro 1) and ((ECON10061 Intro Maths or ECON10071 Adv Maths) and (co-requisite SOST10062 Intro Stats or ECON10072 Adv Stats))
The aims of this course are:
- To provide a self-contained introduction to long-run macroeconomics including long run economic growth, unemployment and inflation for general social scientists.
- To cover the preparatory material for more specialist courses in economics in the second and third years.
- Demonstrate knowledge of measuring economic growth and the major issues of long-run economic growth.
- Understand the concept of modelling economic growth and how different modelling approaches contribute to our understanding of the growth process.
- Understand how the economics of ideas as the engine of growth necessarily leads to imperfect competition between firms and create monopolies.
- Understand why some countries so much richer then others, and why some countries like China are growing much faster then others and for how long.
- Demonstrate knowledge of the major issues of long-term unemployment and inflation.
- Demonstrate a detailed understanding of the factors that determine long-term unemployment.
- Understand the quantity theory of money as the long-term determinant of inflation and the fiscal causes of high inflation.
- Introduction to Macroeconomics/Measuring the Macroeconomy. How macroeconomics studies key questions. How GDP is measured. How to use GDP to measure the evolution of living standards within country over time, and across countries. Alternative measures of living standards.
- An Overview of Long Run Economic Growth. Some facts of economic growth including that it is a relatively recent phenomenon from historical point of view. How economic growth dramatically improved welfare around the world.
- A Model of Production. How to set up a macroeconomic model. How a production function help us to understand the differences in per capita GDP across countries. How too look at economic data through the lens of macroeconomic models.
- The Solow Growth Model. How capital accumulates over time helping us to understand economic growth. The role of diminishing returns to capital in explaining differences in growth rates across countries. The limitations of capital accumulation.
- Growth and Ideas. Why new ideas – new ways of using existing resources – are key to sustained long-run growth. Why “nonrivalry” makes ideas different from other economic goods in a crucial way. How the economics of ideas leads to monopolies. A new model of economic growth: the Romer model.
- The Labour Market, Wages, and Unemployment. How basic supply-and-demand model helps us to understand the labour market. How labour market distortions like taxes and firing costs affect employment in the long-run. How to value your human capital. A key fact: return to university education increased enormously over the past half century.
- Inflation. What inflation is and how costly it can be. How the quantity theory of money allow us to understand where inflation comes from. How nominal and real interest rates are related. The important link between fiscal policy and high inflation.
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).
- Analytical skills
- To provide a detailed and qualified economic perspective on economic growth in the UK and elsewhere from the perspective of a global interdependent world. The ability to provide critical analysis of policies that affect economic growth and cross-country income differences. The ability to provide critical analysis of policies that affect unemployment and inflation in the long run. To use models to interpret economic data.
Summative Assessment (assessment that contributes to your grade)
Past exam papers are not available. You will be provided with a Mock Exam paper which has an identical structure with similar questions to that of the final exam.
25% Mid-term test
The mid-term exam covers the material of the first four weeks. It consists of 30 multiple choice questions chosen randomly froma large pool of questions which are similar to the tutorial questions. Thus, each exam is different but similar in terms of difficulty and scope.
- Mock exam.
- Online quizzes on Blackboard.
- Tutorials feedback.
- Office hours.
- Revision sessions.
- Discussion boards.
- Charles Jones, Macroeconomics, 5th edition (Chapter 1-8). Available online on BlackBoard
|Independent study hours|
|Akos Valentinyi||Unit coordinator|
For every 10 course unit credits we expect students to work for around 100 hours. This time generally includes any contact times (online or face to face, recorded and live), but also independent study, work for coursework, and group work. This amount is only a guidance and individual study time will vary.