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Macroeconomics Timed homework    Aims and objectives This course aims to bring you up to date with modern developments in macroeconomics and to help you analyse the macroeconomic issues of the day

Economics

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Macroeconomics Timed homework 
 

Aims and objectives

This course aims to bring you up to date with modern developments in macroeconomics and to help you analyse the macroeconomic issues of the day.

Learning outcomes

At the end of the course and having completed the essential reading and activities, students should be able to think about and give answers to key macroeconomic questions, for example:

 

e What are the forces that drive long-term prosperity?

 

e Isa growth slowdown in emerging economies inevitable?

 

e Why are real interest rates so low?

 

e What causes bubbles in financial markets?

 

e Does the government have a budget constraint?

 

e How does the labour market respond to structural change and shifting employment patterns?

 

e What is the role of banks and why are they inherently fragile?

 

e ls ita good idea for central banks to set up new digital currencies?

 

e Why does economic activity fluctuate?

e Can and should policymakers seek to ameliorate business cycles?

 

e What options do central banks have when nominal interest rates fall to zero?

 

e What are the causes of global imbalances?

The approach of the course is to discuss the salient features of the data and then go on to present

macroeconomic models to study these questions.

Essential reading

The textbook for the course is Williamson, Macroeconomics, 6" ed. (2018), Pearson.

Assessment

This course is assessed by a three-hour unseen written examination.

Syllabus

Topic 1: The supply side of the economy

Contents: Factors of production (labour, land, and capital), the production function and the supply

side of the economy, the distribution of income between factors (wages, rents, and interest),

population growth, labour-market participation and labour supply, taxation, competitive equilibrium

and efficiency, the Solow model.

Questions to address:

 

e Economies before and after the Industrial Revolution.

 

e Why have hours worked declined in advanced economies even though wages are so much

 

higher than in the past?

 

e Why has wage inequality increased in recent decades?

 

e Should land-value taxes be used?

 

e Isa growth slowdown in emerging economies inevitable?

Topic 2: Economic growth in the long run

Contents: Evidence on economic growth and the income distribution across countries, convergence,

saving rates and the Golden rule, technological progress, international investment flows, institutions

and misallocation, endogenous growth theory, learning by doing, human capital, research and

development, diffusion of knowledge between countries.

Questions to address:

 

e What are the forces that drive long-run prosperity?

 

e Are we saving enough for the future?

 

e Why is the gap between rich and poor countries so large?

 

e How strong should intellectual property rights be?

 

e What are the implications of climate change for the economy?

Topic 3: The demand side of the economy

Contents: Evidence on macroeconomic fluctuations using detrended data, consumption, the

relationship between consumption and income, durable and non-durable goods and services,

interest rates and saving, bond yields, determinants of real interest rates, investment, the stock

market, a dynamic macroeconomic model.

Questions to address: