module specification

This module develops from the foundations of macroeconomics covered in EC4006. The module aims to develop student’s knowledge and understanding of key macroeconomic processes that determine equilibrium in the short-run, medium-run and the long-run. It examines the goods and financial markets as foundation for understanding the IS/LM model in a closed and open economy. These core topics provide the student with the basic understanding of what determines equilibrium in the short-run. This is developed further by introducing the analysis of the labour market, which is the key to an understanding of the AD/AS model and equilibrium in the medium-run. The analysis of the IS/LM model and AD/AS will also be applied to the open economy.  The module proceeds to develop core principles for understanding what determines equilibrium in the long-run. Finally, we consider extensions to the above framework by covering topics such as the Phillips Curve, the role of expectations, exchange rates, government debt, hyperinflation and recent global events.

EC4006 Principles of Economics

The module aims to provide students with:

1. an understanding and explanation of  the main aggregative frameworks in macroeconomics.
2. knowledge of the processes in macroeconomics and the framework available for understanding them.
3. an ability to apply economic principles and analysis in a variety of contexts including business and government;
4. a range of transferable and subject-specific skills that will be of value in terms of providing relevant policy advice.

The module also aims to develop students' skills, in particular: self assessment and reflection; interpersonal and team-working; academic study skills; literacy; communication, including oral presentation; applied analysis; data analysis; quantitative analysis; IT; and self-assessment and reflection.

Goods Market – composition of GDP, demand for goods, determination of equilibrium output.
Financial Market – demand for money, determination of interest rate.
IS/LM Model – deriving the IS relation in a closed economy, deriving the LM relation in a closed economy, analysing policy using the IS/LM model in a closed economy, deriving the IS relation in an open economy, deriving the LM relation in an open economy, analysing policy using the IS/LM model in an open economy.
Labour Market – Wage determination, Price determination, determination of the natural rate of unemployment.
AS/AD Model – deriving the AS relation, deriving the AD relation, equilibrium in the short-run and medium run, effects of monetary expansion/contraction, effects of fiscal expansion/contraction, effects of supply shocks.
The Phillips Curve– Evolution of the Phillips Curve, relation between inflation, expected inflation and the natural rate of unemployment, the Phillips curve and the natural rate of unemployment in Europe, the link between output, unemployment and inflation, disinflation.
The Long Run – Solow Model, role of technical progress, determinants of technical progress.
Expectations – the basic: nominal vs. real interest rates, using the IS/LM model to examine the effects of money growth on inflation and nominal versus real interest rates, expected present discounted values, applications of expectations to financial markets, applications of expectations to consumption and investment, applications of expectations to monetary policy and deficit reduction.
The Open Economy – analysing the effect of increases in domestic and foreign demand, depreciation, savings, investment and trade balance, J-curve, effects of policy under fixed vs. flexible exchange rate regimes, exchange rate crisis under fixed exchange rate versus flexible exchange rates.
Extensions– high debt, hyper inflation, the financial crisis in 2007 – 2010, the euro crisis.

Students’ learning is organised around direct contact time with the teaching team, and refective independent learning. The direct contact time takes place through lectures and seminars. Students are expected to complement this 'formal' learning activity with further reading of the material suggested in the teaching sessions, solving realistic macroeconomic problems using economic analysis, research, writing, planning and preparation for group presentations, class tests, and the final exam.

Student contact time is normally 3 hours per week. Lectures are typically of 2 hours duration and deliver core subject knowledge in macroeconomics, but also provide time for interactive discussion.  The module emphasises the development of macroeconomic theory and its application, with a view to enabling students become conversant with macroeconomic processes as well as current economic issues. The core of the module divides the study of the economy into the short-run, medium-run and long-run. This content is followed by other macroeconomic topics that have real world applications, such as debt, hyperinflation and recent global events such as the financial and euro crises. 

Seminars are typically 1 hour in duration and emphasise the solution of macroeconomic problems based on topics given in the lecture. The emphasis is on student participation and students are expected to develop their abilities to think as policy advisers and to provide soundly economic interpretation of macroeconomic facts.

The group presentations are aimed at developing students’ ability to interpret current macroeconomic facts, in the light of relevant theories, as well as at encouraging peer learning through participation and collaboration.
Contemporary issues may include high government debt, anti-inflation policy, exchange rate policy, government monetary and fiscal policy, global financial crises, unemployment, and the euro. Inititative and independence are developed progressively through the module so that students are required to take greater responsibility for their work.

Professional and transferable skills are developed in lectures and seminars, and through independent directed learning and assessment. Module learning activities will enable the students develop  analytical, communication, presentation, problem solving,collaboration practiced team work through group presentations.  Graduate career development is also examined and practical guidance provided with support from the University careers service. The development of career awareness is promoted within the module by introducing students to career development opportunities such as, internships and work experience, job search techniques, employer recruitment strategies, self-presentation together with a review of skills sought by prospective employers. Written presentation including CVs and personal statements, networking, job application, interviews, and inter-cultural communication are also discussed.

The module makes extensive use of blended learning  through use of virtual learning environment platforms (WebLearn, Publisher E-resources) where module lecture material, course handbooks,test questions, previous assessment with feedback, and other material are made available.  Other ICT resources include links to key web resources such as Government departments, and institutions such as the World Bank, IMF, OECD and ESDS.

On successful completion of this module students will be able to:

1. understand verbal, graphical and mathematical representations of  key macroeconomic concepts and theories;
2. link theoretical and analytical skills in macroeconomics to practice in business,  government and other organisations;
3. be competent communicators of the processes in macroeconomics as well as the effects of stabilization policies  through written and oral expositions;
4. interpret and present economic and financial information effectively in a variety of contexts, using up-to-date statistical and modelling tools and appropriate software;
5. demonstrate life and career development awareness, including vision and personal awareness, presentation, and development.

Students will be assessed by a group presentation (with artefacts), in-class tests and an unseen examination.

Group Presentation (20% of overall mark): Students are required to participate in a small group presentation (consisting of 2-3 students), in which they present one seminar problem.
At the end of the presentation, each individual in the group is required to produce a written statement summarising its content and critically reflecting on the experience of giving the group presentation.

In-class Tests (30% of overall mark): Students are required to take two short in-class tests. The tests have a similar format to the final exam and are based on all the material covered in lectures and seminars.

Unseen Exam (50% of overall mark). At the end of the module students are required to take a two-hour unseen written examination. The exam paper tests the student's knowledge, and their ability to show the scope and depth of their knowledge in macroeconomics and provide solutions to technical questions.

Blanchard, Olivier, Amighini Alessia and Giavazzi, Francesco(2011).  Macroeconomics: A European Perspective, Pearson Education Limited.
Blanchard, Olivier and Johnson, D. (2013). Macroeconomics , 6th ed., Pearson International Education.
Mankiw, N. Gregory  (2013) Macroeconomics, 8th ed., Worth Publishers, McMillan.
Mankiw, N. Gregory  and Taylor, Mark P. (2014) “Macroeconomics, European Edition”, Second Edition, Worth Publishers, McMillan.
Abel, B. and Bernanke, Ben and Croushore, Dean (2010). Macroeconomics, Global edition.
M. Burda and C. Wyplosz(2009). Macroeconomics: A European text, 5th revised edition, Oxford University Press.
J. Brad DeLong (2009). Macroeconomics, 2nd revised edition, McGraw-Hill Education-Europe.