Macroeconomics

The overall purpose of this course is to introduce the student to macroeconomic theory, i.e. to provide a good understanding of how the economy works in the short- and long-run, and to analyze the possibilities and limitations of fiscal and monetary policy. The course consists of three modules.  **Module 1: Economic growth, distribution, and sustainability (5 hp)** The module begins with an introduction to long run economic growth and related questions such as distribution of income, living standards and sustainability. This is followed by a review of concepts that are central to analyzing long-term growth such as aggregate savings, capital accumulation and technological development. The module also covers topics related to technological change and its impact on the labor market and living standards.  **Module 2: The labor market and the financial sector (5 hp)** In this module we focus on the basic cornerstones of macroeconomic analysis, starting by introducing the labor market and its role for understanding the supply side of the economy.  Then the money market and the central bank's role in the economy are covered. In this context, interest rate formation, the connection between the private banking system and the central bank. This module also covers basic concepts of asset pricing as well as asset market bubbles. **Module 3: Macroeconomic policy (5 hp)** This module covers economic shocks and cyclical fluctuations and the role of fiscal and monetary policy. Here, models are introduced that can be used to analyze aggregate supply and aggregate demand in the short and medium term. This part of the course also deals with the open economy and how real and financial flows are reflected in the balance of payments. Exchange rate determination and international financial markets are also covered. Various economic crises and how the economic-political framework can be designed are also studied in this module.