Faculty of Economics and Business
BACHELOR IN ECONOMICS FOURTH YEAR (All itineraries) Course
Advanced Macroeconomics
Code
802371
Module
Economic Analysis
Area
Macroeconomics
Nature
Optative 6
Attendance
4
Credits
Non Attendance
2
Year
4
Semester
7
COORDINATION DEPARTMENT Fundamentos del Análisis Económico II
COORDINATOR AND CONTACT Jesús Ruiz;
[email protected]
SYNOPSIS BRIEF DESCRIPTION Macroeconomic modeling. Formal analysis of dynamics and uncertainty in macroeconomics. Fiscal and Monetary Policy topics. Dynamics of Debt and deficit. The role of credibility and expectations.
PRE-REQUISITES Intermediate courses in economic theory, optimization, statistics and econometrics.
Faculty of Economics and Business
OBJECTIVES To extend the knowledge acquired in Macroeconomics I, II and III, introducing a proper understanding of micro-foundations in Macroeconomics: equilibrium and incentives. The study of markets with frictions, mainly the labor market, and its consequences for macroeconomic policy. The role of credibility and expectations in fiscal and monetary policy. The debate on macro policy effectiveness. Our final goal is to provide a comprehensive view of Macroeconomics related to actual macroeconomic phenomena, trying to fit the actual data with theoretical models.
COMPETENCES General: CG1, CG2, CG3 Transversal: CT1, CT2 Specific: 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. DYNAMIC AGGREGATE DEMAND AND SUPPLY (Economic Fluctuations, Unemployment and Inflation) 1.1.
Unemployment Efficiency wages, union models and labor market search.
1.2.
Aggregate Supply
1.3.
Inflation expectations and the Phillips Curve
1.4.
Consumption, Investment and Aggregate Demand
1.5.
Aggregate Supply and Demand in a small open economy
References: Farmer, ch. 17, 18; Sorensen-Whitta, ch. 11, 12, 13, 17, 18, 23-25. 2. MACROECONOMIC POLICY 2.1.
2.2.
2.3 .
Fiscal policy i)
Fiscal Multipliers and Ricardian Equivalence
ii)
Dynamics of debt and deficits
Monetary Policy i)
The Taylor rule
ii)
Fiscal and Monetary Policy interdependence
iii)
Credibility and uncertainty
The effectiveness of macroeconomic policy (Real Business Cycles and New-Keynesian)
Faculty of Economics and Business 2.4
Supply-side economics
2.5
The Welfare State. Pension reform.
References: Farmer, ch. 14; Sorensen-Whitta, ch. 15, 16, 19-22. Heijdra, ch. 10.
TEACHING ACTIVITIES DISTRIBUTION Theoretical lessons
% of Total Credits
40%
Practical lessons
% of Total Credits
15%
Other Activities
% of Total Credits
12%
The last 12% corresponds to personalized & group tutoring, and evaluation. Hours to Study: 33%
ASSESSMENT Exams
% Share of Final grade 50 %
Final Exam
Other Activities
% Share of Final grade 35%
2 Intermediate Exams
Other activities
& Share of Final grade
15%
Presentation of problem set and active participation in the classroom
EVALUATION CRITERIA Those in the Table above. “Not shown” corresponds to students that do not show up either in “convocatoria ordinaria” or “convocatoria extraordinaria” Final Exams
TIMETABLE WEEK 1 2 3 4 5 6 7 8 9 10 11 12 13 14
CONTENTS SECTION 1.1 SECTION 1.1 (cont.) SECTION 1.2 SECTION 1.3 SECTION 1.4 SECTION 1.5 SECTION 1.5 (cont.) SECTION 2.1 SECTION 2.1 (cont.) SECTION 2.2 SECTION 2.2 (cont.) SECTION 2.3 SECTION 2.4 SECTION 2.5
LECTURE WORK 4h Theory & Practice 2h Theory & Practice 4h Theory & Practice 2h Theory & Practice 4h Theory & Practice 2h Theory & Practice 4h Theory & Practice 2h Theory & Practice 4h Theory & Practice 2h Theory & Practice 4h Theory & Practice 2h Theory & Practice 4h Theory & Practice 2h Theory & Practice
SEMINAR WORK Problem Set 1: 1h + 1h Problem Set 2: 1h + 1h Problem Set 3: 1h + 1h Exercise 1: 1h + extra Problem Set 4: 1h + 1h Problem Set 5: 1h + 1h Exercise 2: 1h + extra
Faculty of Economics and Business NOTE: This course plan is only tentative because it may be modified according to the official holidays to be announced.
RESOURCES BASIC BIBLIOGRAPHY P.B. SORENSEN y H.J. WHITTA-JACOBSEN (2011, 2nd Ed.): Introducing Advanced Macroeconomics.
COMPLEMENTARY BIBLIOGRAPHY B. HEIJDRA (2009, 3ª edición), The Foundations of Modern Macroeconomics, Oxford University Press. R. FARMER (2002), Macroeconomics, SouthWestern College. Alfonso NOVALES y Carlos SEBASTIAN (1999): Análisis Macroeconómico. Volumen I. Marcial Pons.
OTHER RESOURCES Course notes
Faculty of Economics and Business
