FE5003 - Macroeconomics (2018/19)
|Module specification||Module approved to run in 2018/19|
|Module level||Intermediate (05)|
|Credit rating for module||30|
|School||Guildhall School of Business and Law|
|Total study hours||300|
|Running in 2018/19||
This module develops from the foundations of macroeconomics covered at Level 4. The module aims to develop students’ knowledge and understanding of key macroeconomic processes that are interpreted to operate around the concept of equilibrium in the short-run, medium-run and the long-run. It examines the goods and financial markets as a foundation for understanding macroeconomic models of a theoretically ‘closed’ [a single market] and ‘open’ [an economy open to exchanges with others] economies. Students are encouraged to reflect and draw on their own backgrounds and experiences in differing economies during class discussions and to relate these experiences to the economic concepts and principles developed in the module.
The core topics of the module provide the student with the basic understanding of what may determine equilibrium in the short-run. This is further developed by introducing the analysis of the labour market, and the concept of the expectations-augmented Phillips Curve, and market equilibria in the medium-run.
The module proceeds further to develop core principles for understanding the idea of equilibrium in the long-run, examining the idea of exogenous and endogenous factors in models of economic growth. Finally, we consider extensions to the above framework by covering topics such as the role of information and expectations in macroeconomic policy, exchange rates, debt and recent global events. Internationalisation is addressed in the open economy models.
Prior learning requirements
Introductory Economics or equivalent Level 4 Economics Principles
Goods Market – composition of GDP, demand for goods, determination of equilibrium output. LO1
Financial Market – demand for money, determination of interest rate.
IS/LM Model – deriving the IS and LM relations 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. LO1
Labour Market – Wage determination, Price determination, determination of the natural rate of unemployment. LO2
The Expectations-Augmented 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. Effects of monetary and fiscal policies, effects of supply shocks. LO1
The Long Run – Solow Model, role of technical progress, determinants of technical progress. Endogenous growth theory. LO3
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. LO3
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– government debt, inflation, the recent financial crisis LO4
Balance of independent study and scheduled teaching activity
Students’ learning is centred on 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 weekly contact time is normally 3 hours. Lectures are typically of 2 hours duration and deliver core subject knowledge in macroeconomics. They also provide time for interactive workshops. The module emphasises the development of macroeconomic theory and its changing applications, with a view to enabling students to become conversant with macroeconomic processes as well as different views of stabilisation policy. The core of the module accepts the division of analysis of the economy into the short-run, medium-run and long-run. This coverage is followed by other real world, macroeconomic topics such as debt, inflation and recent global events such as the 2007-8 financial crisis and the euro.
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 work in groups. The module develops students’ ability to think as policy advisers by providing sessions on the application of macroeconomic policy. These sessions enhance students’ ability to provide an economic interpretation of empirical findings, analyse policy debates and develop peer learning through participation and collaboration.
Inititative and independence are developed 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 reinforced through independent directed learning and assessment. Module learning activities will enable the students develop analytical, communication, presentation, problem solving, collaboration practised in group workshops and 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. During the year, written presentation including CVs and personal statements, networking skills, job application processes, the challenge of 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 FRED, Government departments, and institutions such as the World Bank, IMF, OECD and ESDS. Various sessions use Excel-based sessions to analyse real-world data.
Equality is promoted by treating all students with dignity and as of equal worth, while also raising their aspirations whilst supporting achievement for our students who have with diverse learning requirements, entitlements and backgrounds. Individual time is made available for students with particular needs and a healthy open dialogue is encouraged throughout the module.
On successful completion of this module students will be able to:
1. assess verbal, graphical and mathematical representations of key macroeconomic concepts and theories;
2. apply theoretical and analytical concepts in macroeconomics to practice in business, government and other organisations;
3. use economic and financial information and macroeconomic processes in a variety of contexts through written expositions;
4. demonstrate life and career development awareness, including vision, presentation, and teamworking.
Formative Assessment during the module will involve:
• In-class questions and problem-solving activities during lecture time
• Seminar questions/exercises and self-evaluation at the end of each class.
• Students to act as learning resources for one another, by in-class discussion and working in small groups
Students are formally assessed by a group presentation, one in-class test and an unseen examination.
Group Presentation (25% of overall mark): Students are required to participate in a small group presentation (consisting of 2-3 students), in which they present one topic/question. Student peers and the module leader will discuss the presentation in class and use it as a springboard for deeper learning in the topic. At the end of the presentation, each individual in the group will be required to produce a written statement summarising its content and critically reflecting on the experience of giving the group presentation. The assessment component will test student’ ability to apply theoretical and analytical concepts in macroeconomics to real-world problems in business, government and other organisations.
In-class Test (25% of overall mark): Students are required to take a one-hour in-class test. The test is based on all the material covered in lectures and seminars up to week 13 and will test students’ ability to assess verbal, graphical and mathematical representations of key macroeconomic concepts and theories.
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 will test the students’ scope and depth of knowledge, analytical capacities and their ability to provide solutions to policy-related questions, using economic and financial information and macroeconomic processes in a variety of contexts.
Blanchard, Olivier; Amighini Alessia and Giavazzi, Francesco(2017). Macroeconomics: A European Perspective, 3rd edition, Pearson.
Blanchard, Olivier. (2017). Macroeconomics , 7th ed., Pearson.
Mankiw, N. Gregory (2016) Macroeconomics, 9th ed., Macmillan.
M. Burda and C. Wyplosz(2017). Macroeconomics: A European text, 7th revised edition, Oxford University Press.
Jones, C.I., Macroeconomics (2018), 4th edition, Norton
Barreto, H., (2016). Teaching Macroeconomics with Microsoft Excel, CUP.
Journal of Economic Perspectives
Oxford Review of Economic Policy