Faculty of Economics and Business
BACHELOR IN ECONOMICS THIRD YEAR Course
Macroeconomics III
Code
802365
Module
Economic Analysis
Area
Macroeconomics
Nature
Compulsory 8
Attendance
4.8
Credits
Non Attendance
3.2
Year
3
Semester
6
COORDINATION DEPARTMENT Fundamentos del Análisis Económico I
COORDINATOR AND CONTACT Ignacio Valero Perandones;
[email protected]
SYNOPSIS SUMMARY Formal analysis of the key macro variables in the medium-run and long-run. The AS – AD Model. Economic growth.
PRE – REQUISITES Macroeconomics I and II are recommended.
OBJECTIVES Provide an understanding of theoretical models on the link between economic agents and markets in the medium-run and long-run. In addition, available empirical evidence will be provided for those theoretical models and the current macroeconomic situation.
COMPETENCES General: CG1, CG2, CG3, CG4 Transversal: CT1, CT2, CT3 Specific: CE3, CE6, CE8, CE9
Faculty of Economics and Business
LEARNING METHODOLOGY A mixed methodology of teaching and learning will be used in all educational activities with the aim of encouraging students to develop a collaborative and cooperative attitude in the pursuit of knowledge.
TOPICS COVERED (SYLLABUS) 1. The labor market. 2. The AS – AD Model. 3. Public deficit, public debt and sustainability. 4. The facts of growth. 5. The Solow growth model. 6. Alternative theories of economic growth. The economics of ideas. Romer’s
m
odel
TEACHING ACTIVITIES Theoretical lectures
% of Total Credits
35%
Presentation of theoretical and empirical contents. Some preparation in advanced is recommended.
Practical tutorials
% of Total Credits
10%
Exercises and practical cases. Seminars represent ¼ of total classes and are one hour long. They will be announced one week in advance.
Other Activities
% of Total Credits
55%
Personalized and group tutoring, assessment activities, individual and group homework assignments and hours of study.
ASSESSMENT Exams
% Share of Final Grade
50%
% Share of Final Grade
40%
% Share of Final Grade
10%
Final Exam
Midterm activities Intermediate exams / exercises
Other activities Active participation in the classroom
Faculty of Economics and Business
EVALUATION CRITERIA There are two parts: 1st part: a common final exam for all groups (60% of the final mark). This exam has multiple choice and essay questions. To pass it would be necessary to obtain a minimum in the essay questions part. 2nd part: continuous evaluation with, among other things, at least two intermediate exams (40% of the final mark). A student is considered as “presented” in June if she/he attends any of the intermediate exams other than the first one. The student is considered as “not presented” in July if she/he does not attend the exam in July.
Faculty of Economics and Business
SCHEDULE Week 1st
Contents LECTURE 1: The Labor market (I) Wage Determination. Price Determination.
2nd
LECTURE 1: The Labor market (II) Medium term equilibrium in the labor market. Natural rate of unemployment. Natural level of output. LECTURE 2: Aggregate Supply – Aggregate Demand Model (I) The Derivation of the Aggregate Supply. The Derivation of the Aggregate Demand. LECTURE 2: Aggregate Supply – Aggregate Demand Model (II) Equilibrium in the short run and in the medium run. Shocks to Aggregate Demand. Market adjustment in the short run and medium run. LECTURE 2: Aggregate Supply – Aggregate Demand Model (III) The effects of the Fiscal Policy. The effects of the Monetary Policy. Shocks to Aggregate Supply and policy. LECTURE 3: The facts of Growth (I) Introduction. Economic facts. Per capita Income. PPP comparisons. Economic convergence. LECTURE 3: The facts of Growth (II) Analytical tools. The Neoclassical Production Function. Growth Accounting. The Sources of Growth.
3rd
4th
5th
6th
7th
8th
9th
LECTURE 4: The Solow Growth Model (I) – without technological progress Basic assumptions. Capital accumulation. Income growth in the long-run LECTURE 4: The Solow Growth Model (II) – without technological progress The steady state. The saving rate and the golden rule.
Seminars
Homework • Reading Blanchard: Chaps. 7 • Problem Set • Reading Blanchard: Chaps. 7 • Problem Set •
•
Reading Blanchard: Chap. 8 Problem Set
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Reading Blanchard: Chap. 8
•
•
Reading Blanchard: Chap. 8 Problem Set
• •
Reading Blanchard: Chap. 11 Problem Set
• •
Reading: Blanchard: Chap. 11 Problem Set
•
•
Reading Blanchard: Chap. 12 Problem Set
• •
Reading Blanchard: Chap. 12 Problem Set
• Problem Set
•
Short Exam 1
Faculty of Economics and Business 10th
11th
12th
13th
14th
•
Reading Blanchard: Chap. 13 Problem Set
LECTURE 4: The Solow Growth Model (IV) Growth of income, per capita income and effective per capita income. The steady state.
•
Reading Blanchard: Chap. 13 Problem Set
LECTURE 5: Alternative Theories of Economic Growth (I) Determinants of Technological progress. The reward of research. Increasing Returns to Scale.
•
Reading Jones (2001): Chap. 4 Problem Set
• •
Reading Jones (2001): Chaps. 4 & 8 Problem Set
• •
Reading Blanchard: Chap. 21 Problem Set
LECTURE 4: The Solow Growth Model (III) – with technological progress Exogenous technological progress. The production function, labor factor and effective work. The dynamics of capital and production.
LECTURE 5: Alternative Theories of Economic Growth (II) Non rival and non exclusion goods. The economy of ideas. Endogenous growth models. LECTURE 6: Public Deficit, Public Debt and Sustainability The government’s budget constraint. Analysis of the debt/GDP ratio. The dynamics of the public debt.
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Short Exam 2
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•
• •
Short Exam 3
Faculty of Economics and Business
RESOURCES BOOK LIST Blanchard, O., Amighini, A. and Giavazzi, F. (2012) Macroeconomics. A European Perspective Ed Pearson, Prentice Hall.
COMPLEMENTARY BIBLIOGRAPHY Jones, C. (2011) Macroeconomics W. W. Norton & Company; 2nd International student Edition. Jones C., Vollrath, D. (2013) Introduction to economic growth. 3a Edición. W.W. Norton.
OTHER RESOURCES Additional material is available in: http://www.ucm.es/info/macroint
