AØKB08024U Macroeconomics B

The aim of the course is to describe and explain the macroeconomic fluctuations in the short run, i.e. the business cycles around the long run growth trend, as well as various issues related to this, and to teach the methodology used in formulating and solving formal models explaining these phenomena.

Students are to learn the most important stylized facts about business cycles and to acquire knowledge about theoretical dynamic models aimed at explaining these facts. In connection with this, the aim is to make students familiar with the distinction between deterministic and stochastic models. Furthermore, students are to gain an understanding of the distinction between the impulses initiating a business cycle and the propagation mechanisms that give business cycles a systematic character. Finally students are to learn how to use the models for analyzing the effects of macroeconomic stabilization policy under various assumptions regarding the exchange rate regime.

To obtain a top mark in the course students should at the end of the course be able to demonstrate full capability of using the techniques of analysis taught in the course as well as a thorough understanding of the mechanisms in the business cycle models for open and closed economies, including the ability to use relevant variants and extensions of the models in order to explain the effects of various shocks and the effects of macroeconomic stabilization policies under alternative monetary and exchange rate regimes.