DESCRIPTION OF THE COURSE

The Macroeconomics course studies the economy as a whole, analyzing the determination of production, both in the short and in the medium run. These two periods of time have been studied by the students in the course "Introduction to Economics II: Principles of Macroeconomic"s; thus, the concepts that were already introduced in that course will be studied in detail: gross domestic product, the rate of unemployment and the instruments of fiscal policy and monetary policy in a closed economy. These concepts are treated in the three first lessons by means of models that help to explain what determines the level of production and the interest rate in the short run and how the central bank can influence its determination.

Lessons 4, 5 and 6 develop the supply side and analyze the determination of production in the medium run. In order to this, we introduce the labor market into our analytical framework and look into the relation between inflation and unemployment, with a view to understanding the determination of output, employment and inflation in the short as well as in the medium run.

Lesson 7 analyzes the determination of the long run level of production, a time period in which growth dominates. In order to understand eonomic growth, attention is focused on the effects of saving and capital accumulation on production.

In lesson 8 a version of the open economy based on the IS-LM model is introduced, in order to characterize the joint changes in production, the interest rate and the exchange rate. This analysis is complemented with the study of the effects of fiscal policy and monetary policy on economic activity when both the goods markets and the financial markets are open to the rest of the world.

The knowledge acquired in the Microeconomics courses by means of the use of graphical and mathematical tools are a good basis for understanding the Macroeconomics course. Likewise, the Econometrics course of the third year of the degree helps to understand the empirical contrasts of the analytical macroeconomic models analyzed.

The Macroeconomics course provides the prospective graduate with tools that will help her/him to understand the behavior of the economy as a whole and the effects of monetary and fiscal policies on the economy.



Should there happen an exceptional state because of a pandemic or some other cause, both the teaching methodology as well as the evaluation systems will be adapted to the exceptional situation in accordance with the regulations enacted by the authority.

SPECIFIC COMPETENCES OF THE COURSE

C1. Understand how main economic variables: production, inflation, interest rate to name a few are determined.

C2. Understand macroeconomics from a global perspective in the short and medium run.

C3. Evaluate the impacts of fiscal and monetary policy in the short and medium run.

C4. Identify the determinants of unemployment and understand the policy impacts on unemployment.

C5. Understand the determinants of growth and the workings of an economy in the long run

C6. Understand the relation between inflation and unemployment.

C7. Relate the models to real-life phenomena.



COURSE OBJECTIVES

1. Employ the IS-LM model to analyze the effects of fiscal and monetary policies on interest rates and income in the short run in closed economies.

2. Understand the relation between inflation and unemployment.

3. Understand the relations between employment, the general price level and macroeconomic expectations in the medium run.

4. Use the IS-LM-PC model to understand the effects of the different economic policies.

5. Understand the continuous growth of aggregate production over time

6. Analyze the role of expectations in output fluctuations.



LEARNING RESULTS

1.- To understand the concept and determination mechanisms of the main macroeconomic variables: gross domestic product, unemployment rate and inflation rate.

2.- Capacity to obtain the IS-LM relation in a closed economy both in the short run and in the medium run.

3.- Capacity to obtain the IS-LM relation in an open economy in the short run.

4.- To know how to interpret in economic terms the results that have been obtained mathematically.

5.- Capacity to interpret relevant data in order to form reasoned opinions on relevant issues of social or economic interest.



CROSS-CUTTING SKILLS OF THE COURSE

1. To search, analyze, and synthesize information coming from different sources.

2. To be able to reason according to macroeconomic principles and to produce clear and coherent reports.

3. To develop learning abilities aimed at the development of independence in future education processes.

SYLLABUS



1. The goods markets

2. The financial markets

3. The IS-LM model

4. The labor market

5. The Phillips Curve

6. The IS-LM-PC model

7. Economic Growth

8. The open economy

METHODOLOGY



The key teaching tool are the lectures, in which we will develop the different topics of the course. In practical lessons, the teacher will solve problem corresponding to the topic covered in the lectures. During the seminar class meetings, the students will solve questions/problems related to the topic of the course either individually or in groups.

• Continuous Assessment System
• Final Assessment System
• Tools and qualification percentages:
  • Written test to be taken (%): 70
  • partial/s (%): 30

EVALUATION SYSTEM ON FIRST CALL(end of the first semester):



(1) Continuous assessment:

1. It comprises one or several partial exams and a final exam. All the specifics will be announced at the beginning of the course. The partial exams count 30% (40% at most) of the final grade of the course.

2. A final exam that counts 70% (60% at least) of the final grade of the course. This exam will take place on the date and time set by the Office of the Dean. It will comprise theoretical as well as practical exercises about the whole set of questions discussed in the course.



(2) The student, under the conditions established by the current regulations, may choose to be graded by a single final exam which will count 100% of the final grade.



IMPORTANT NOTICE: All exams are to be conducted on the premises of the School of Economics and Business of the University and the student must be physically present. This rule also applies to any claims that students may file concerning their exam results.

EVALUATION SYSTEM ON SECOND CALL (end of the second semester).

Single final exam: this exam counts 100% of the final grade. It will comprise theoretical as well practical exercises about the whole set of questions discussed in the course.



IMPORTANT NOTICE: All exams are to be conducted on the premises of the School of Economics and Business of the University and the student must be physically present. This rule also applies to any claims that students might file concerning their exam results.

BLANCHARD, Olivier. "Macroeconomics", 7th ed., 2017. Pearson

Basic bibliography

BLANCHARD, Olivier. "Macroeconomics", 7th ed., 2017. Pearson

In-depth bibliography

- DELONG, B. & OLNEY, M. "Macroeconomics", 2nd ed., 2005, McGraw-Hill.
- DORNBUSCH, FISCHER & STARZ, 12th ed., 2014. McGraw-Hill.
- MANKIW, N. GREGORY. "Macroeconomics", 9th ed., 2016, Macmillan.

Web addresses

www.pearson.es/blanchard
www.ine.es
www.bde.es
www.ecb.int
www.oeced.org
www.imf.org