Faculty of Economics and Business
BACHELOR IN ECONOMICS THIRD YEAR Course
Macroeconomics III
Code
802365
Module
Economic Analysis
Area
Macroeconomics
Nature
Compulsory 8
Attendance
3,6
Credits
Non Attendance
4,4
Year
3
Semester
6
COORDINATION DEPARTMENT Fundamentos del Análisis Económico I
COORDINATOR AND CONTACT Ignacio Valero Perandones;
[email protected]
% OF TOTAL CREDITS
ATTENDANCE
Lectures
30%
100%
Classes
10%
50%
Tutorials
6%
100%
Assessment activities
4%
100%
Homeworks and class assignments
20%
0%
Time to study
30%
0%
TEACHING ACTIVITIES
SYNOPSIS
Faculty of Economics and Business
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
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 model (90).
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
Faculty of Economics and Business Active participation in the classroom
EVALUATION CRITERIA There are two parts: 1st part: a common final exam for all groups (50% 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 (50% 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 “presented” in July if she/he attends the exam in July.
Continuous assessment in the extraordinary examination: in case one student has failed the ordinary examination, having attended the final exam and participated in the continuous assessment, the mark to be considered as continuous assessment for that extraordinary examination will be the final mark obtained in the ordinary examination.
Faculty of Economics and Business
SCHEDULE Week 1st
2nd
3rd
4th
5th
6th 7th
8th
Contents LECTURE 1: The Labor market (I) Wage Determination. Price Determination. INDICATORS 1: LABOR MARKET 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. SEMINAR: THE AS-AD MODEL LECTURE 3: Public Deficit, Public Debt and Sustainability The government’s budget constraint. Analysis of the debt/GDP ratio. The dynamics of the public debt.
Homework Reading Blanchard et al.: Chap. 7 Problem Set
Reading Blanchard et al.: Chap. 7 Problem Set
Reading Blanchard et al.: Chap. 8
Reading Blanchard et al.: Chap. 8
Problem Set Problem Set
Reading Blanchard et al.: Chap. 8 Problem Set
PRACTICE 1 Reading Blanchard et al.: Chap. 21 Problem Set
INDICATORS 2: DEFICIT AND DEBT SHORT EXAM 1 (THE LABOR MARKET AND AS-AD MODEL) LECTURE 4: The facts of Growth (I) Introduction. Economic facts. Per capita Income. PPP comparisons. Economic convergence.
Reading Jones (2001): Chap. 1 Problem Set
Faculty of Economics and Business 9th
LECTURE 4: The facts of Growth (II) Analytical tools. The Neoclassical Production Function. Growth Accounting. The Sources of Growth.
Reading Jones (2001): Chap. 1 Problem Set
10th
LECTURE 5: The Solow Growth Model (I) – without technological progress Basic assumptions. Capital accumulation. Income growth in the long-run. The steady state. The saving rate and the golden rule. LECTURE 5: The Solow Growth Model (II) – with technological progress Exogenous technological progress. The production function, labor factor and effective work. The dynamics of capital and production.
Reading Jones (2001): Chap. 2 Problem Set
Reading Jones (2001): Chap. 2 Problem Set
LECTURE 5: The Solow Growth Model (III) Growth of income, per capita income and effective per capita income. The steady state.
11th
12th
13th 14th
15th
LECTURE 6: Alternative Theories of Economic Growth The economy of ideas. The reward of research. Increasing Returns to Scale. Non rival and non exclusion goods. SEMINAR: THE SOLOW GROWTH MODEL LECTURE 6: Alternative Theories of Economic Growth Endogenous growth models: the Romer model (1990)
SHORT EXAM 2 (GROWTH)
Reading Jones (2001): Chap. 2 & 4 Problem Set
PRACTICE 2
Reading Jones (2001): Chap. 5 Problem Set
Faculty of Economics and Business
RESOURCES BOOK LIST Blanchard, O., Amighini, A. and Giavazzi, F. (2012) Macroeconomics. A European Perspective Ed Pearson, Prentice Hall. Blanchard, O. (2016) Macroeconomics. Ed Pearson, Prentice Hall. 7th Edition.
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
