AØKA08006U  Macroeconomics C

Volume 2013/2014
Education
BSc in Economics - compulsory
MSc in Economics
Content
Course Content
The aim of the course is to provide insight into the basic models, concepts, methods and results of modern
macroeconomics and to be a prerequisite for the more specialized macroeconomic courses (Advanced
Macroeconomics, Economic Growth, Monetary Economics: Macro Aspects, Development Economics:
Macro Aspects, and International Monetary Economics). Among other things the course will focus on
• What determines savings and capital accumulation in a general equilibrium framework.
• How will taxes and public debt affect the economy?
• What are the effects of uncertainty and expectations?
• Why is money valued and how it affects capital accumulation?
• How is stabilization policy affected by the way expectations are formed?
• The political limits to monetary and fiscal policy.
Learning Outcome
At the end of the course, the student should be able to demonstrate:
Understanding of the main model frameworks for long‐run macroeconomics. This includes the Diamond
model with overlapping generations in discrete time and the Ramsey model in continuous time.
Proficiency in the application of the concepts and methods from these frameworks, including competence
in dynamic optimization and dynamic analysis in discrete and continuous time.
Understanding of the role of expectations and basic knowledge of macroeconomic models with forward looking
expectations under both perfect foresight and uncertainty and rational expectations. Time consistent and credibility issues regarding monetary and fiscal policy as well as institutional solutions.
Proficiency in the application of the related concepts and methods.
Competence in analyzing a macroeconomic problem, where the above‐mentioned concepts and methods
are central, that is competence in solving such models and explaining in economic terms the results and
implications and how they derive from the assumptions of the model.
The particularly good performance, corresponding to the top mark, is characterized by a complete fulfillment
of these learning objectives.

Syllabus:

Main textbook:

  • Romer, David, (2012): “Advanced Macroeconomics” McGraw Hill, fourth ed, chapters 1, 2, 6, 7, 12.

Additional textbooks and bibliography:

  • Persson, Torsten and Guido Tabellini, (2000): “Political Economics”, MIT Press, chapters 15, 17
  • Blanchard, Olivier and Stanley Fischer, (1989) “Lectures on Macroeconomics”, MIT Press, chapters 2, 3, 4, 5.
  • Peter Birch Sørensen and Hans Jørgen Whitta-Jacobsen, (2010): "Introducing advanced Macroeconomics growth and business cycles", MacGraw-Hill. Chapters  21.
  • Chiang, Alpha and Kevin Wainwright, (2005), “Fundamental Methods of Mathematical Economics", McGraw Hill, chapter 20.
  • Chiang, A., (1999) “Elements of Dynamic Optimization", Waveland, chapters 7, 8 and 9.
  • Blinder, Alan (1998), “Central Banking in Theory and Practice", MIT Press, chapter 3.
  • Werning, I., (2012) “Optimal monetary and fiscal policy in a liquidity trap", MIT workingpaper.
As a part of the course, three out of four written assignments should be completed and accepted. This is a requirement for enrolling for the exam.
The course requires knowledge equivalent to that achieved in Macroeconomics A, Macroeconomics B, Econometrics A and B.
Lectures 3 hours a week (on average) and classes 3 hours a week for 14 weeks
Credit
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Exam registration requirements
As a part of the course, three out of four written assignments should be completed and accepted. This is a requirement for enrolling for the exam.
Aid
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % external censorship
Exam period
Will be published before the start of the semester
Re-exam
Same as ordinary. But if only a few students have registered for the re-exam, the exam might change to an oral exams with a synopsis to be handed in. This means that the examination date also will change.
Criteria for exam assesment
The Student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.
  • Category
  • Hours
  • Lectures
  • 42
  • Class Exercises
  • 42
  • Preparation
  • 119
  • Exam
  • 3
  • Total
  • 206