Macroeconomic Environment 1

CLASS DESCRIPTION

Contact Details

Class overview

This class aims to introduce students to some of the major perspectives and theories in macroeconomics and develop an appreciation of how macroeconomic policy influences the business environment.

Syllabus

(a) Topics

The topics covered in this class, together with recommended reading, are as follows:

Economic Growth: Macroeconomics of the Long Run.

This topic develops an understanding of the factors which contribute to the growth of an economic system. Conventional exogenous growth models are considered and endogenous growth models introduced and confronted with the evidence.

References

• Nick Crafts (1996) “Post Neo Classical Growth Theory: What are the Policy Implications”, Oxford Review of Economic Policy, Vol 12, No 2, pp 30-48
• Nick Crafts (1999) “Economic Growth in the Twentieth Century”, Oxford Review of Economic Policy, vol 15, no 4, pp 18-34.
• *Carlin, W and D Soskice (2006) Macroeconomics: Imperfections, Institutions & Policies, chapters 1 (part 2), 13 and parts of 14.. ( Oxford University Press: Oxford )

NAIRUs and the Macroeconomics of the Short and Medium Runs.

Aggregate demand, aggregate supply and business cycles. Inflation, unemployment and monetary rules. Supply side policies and equilibrium unemployment (NAIRUs) in the medium run. Regional extensions.

References

• *Carlin, W and D Soskice (2006) Macroeconomics: Imperfections, Institutions & Policies, chapters 1 (part 1), 2, 3 and 4. ( Oxford University Press: Oxford )
• Cromb, R (1993) “A Survey of Recent Econometric Work on the NAIRU”, Journal of Economic Studies, vol. 20, Winter/Spring, pp. 27-51.
• Friedman, M (1968) “The Role of Monetary Policy”, American Economic Review, vol. 58, March, pp. 1-17.
• Layard, R, S Nickell and R Jackman (1991) Unemployment: Macroeconomic Performance and the Labour Market, Oxford University Press
• Phelps, E (1994) Structural Slumps, Harvard University Press.

 * Indicates an especially recommended reference

Assessment Structure

(a) Elements of assessment

There is one formal assessed element in this class, consisting of a written assignment contributing 100% of the overall mark for the ME1 class. However, it should also be pointed out that there are voluntary Exercises posted for Topics 2, 3 and 4. If your performance in these exercises exceeds that in the assessed classwork assignment, then your tutor may raise your final grade for the class to take account of that performance in the three exercises. Marks will NOT be subtracted from the Assessed Assignment essay grade if you perform less well (overall) in the three voluntary Exercises than you do in the Assessed Assignment.

(b) Class Specific Assessment Criteria

Assignment

The written assignment should demonstrate that students have acquired an ability to utilise the economic concepts and approaches covered in the class in analysing the macro economy.
In the course of doing this there should be evidence of:

• An awareness of the requirements in presenting the results of macro economic analysis in an applied context 
• The ability to reach a conclusion based upon a balanced interpretation of secondary sources such as official reports, independent commentary and academic papers

Learning Outcomes

(a) Knowledge and Understanding

On completion of this class students should have developed the following capabilities:

• a knowledge of some major perspectives and theories in macroeconomics 
• an appreciation of how macroeconomic policy influences the business environment 
• an understanding of the constraints faced by policy makers 
• an ability to identify, extract and utilise key macroeconomic data and forecasts for use in analysing the current and likely business environment

(b) Practical Professional Skills

On completion of this class students should have developed

• an ability to identify, extract, interpret and present information from public sources relevant to macroeconomic analysis 
• an awareness of the problems in communicating their knowledge of the macroeconomic environment with other economists and non-specialists in an organisation.

(c) Achieving the Intended Outcomes

This class employs complementary methods to assist in achieving the intended learning outcomes:

• The lessons (and audio material) will provide you with an introduction to each of the topics covered in this class that will concentrate on the general principles involved.
• The directed reading will provide a more extensive discussion of each topic, and point to additional reading should you wish to pursue any topic further. 
• The assessed essay will provide an opportunity to examine a particular macroeconomic issue in depth. Working on the essay will reinforce the experience gained in tutorials of communicating with other economists and non-specialists. 
• Discussion Forums (in this class called "Exercises") are an important part of this class and provide the opportunity for reflection on the material provided in lectures and in the directed reading. They may also raise the final mark you achieve for the ME2a class.