Macroeconomics

Content and Form of Instruction The course begins with a brief revision of basic concepts in the field of national accountancy as well as a revision of definitions of various macroeconomic quantities such as Gross Domestic Product and Net Domestic Product, national income, trade and foreign exchange balance, consumer price index, inflation, and unemployment rate. The course will then cover the connection between real and monetary aspects of the economy and the ways in which monetary supply and demand determines price levels and interest rates. The course will also cover the connection between monetary growth and rate of inflation as well as the social costs of inflation. In addition, the course will cover the conditions for monetary and financial policy in small-scale open economies; this theme will be linked to a discussion on various types of exchange rate regimes and their consequences for the efficiency of various monetary and financial policies. The rest of the course will look at the problem of unemployment, long-term growth, and the consequences of permanent deficits in the budget of the public sector. Instruction is in the form lectures and a seminar assignment, involving the calibration and simulation of a dynamic general equilibrium model.