APPLIES TO ACADEMIC YEAR 2014/2015

BST 1612 Applied Macroeconomics

Responsible for the course
Terje Synnestvedt

Department
Department of Economics

Term
According to study plan

ECTS Credits
15

Language of instruction
Norwegian

Introduction
In combination with BTH 1613 Bachelor Thesis, Applied Macroeconomics (15 credits) this course will constitute a specialization of 30 credits. It will be stated on the diploma that it is a specialization. It applies to students on the Bachelor Programme in Business Administration. The course may also be chosen by other students as an elective in their third year of study.

Macroeconomics is the study of a country’s economy as a whole. The discipline deals with phenomena such as long-term economic growth, cyclical movements, financial instability, unemployment, price rise and current external account deficits or surpluses. Analyses of how the authorities may influence the macroeconomic development through fiscal and monetary policies form a central element in this course.

Learning outcome
The course is intended to provide the students with an insight into macroeconomic mechanisms and relations that are important to the Norwegian economy and Norwegian politics both in the short and long term. There will be an emphasis on the interaction between financial markets, monetary and fiscal policies and cyclical movements. The monetary policy of the Bank of Norway and fiscal policy issues will form central elements. Through the discussion of important and relevant macroeconomic problems such as macroeconomic instability, financial crises, the use of oil revenues, the great increase in the number of elderly people and economic globalisation, etc., the course places an emphasis on linking theoretical insight to important macroeconomic phenomena and development features.

The course places an emphasis on econometric methods and analysis tools for the analysis of cyclic data, and on making forecasts based on estimated model contexts. Thus, the course provides an introduction to time series econometrics and relevant software.

Acquired knowledge
On completion of the course the students shall have an understanding of:

• The interaction between the real market, the money market, the currency market and the labour market, and in this context be able to account for potential effects of the economic policy related to central variables such as aggregate production, unemployment, inflation, the current balance and the balance of trade.
• The meaning and importance of financial stability and familiarity with the measures the authorities may implement to preserve financial stability.
• Central driving forces for economic growth and an ability to account for how the long-term growth path is affected by underlying factors such as savings rate and growth in total factor productivity.
• Short-term and long-term effects of the use of oil revenues in the Norwegian economy, as well as an insight into fundamental problems related to public budgets and pensions.

• The students are to be able to find macroeconomic data and perform empirical analyses of these data on their own.
• The students are to be able to discuss macroeconomic problems by means of various model-based approaches and as part of this be able to account for strengths and weaknesses in connection with different macroeconomic models.

• The students shall have an ethical awareness of the basic conflicts of interests and goal conflicts related to economic policy, including the goal conflict between efficiency and income equalization.
• The students shall be able to assess a macroeconomic problem from different angles with respect to the economic interests of various groups.
• The students are to develop a critical sense regarding possible divergences between stated political goals and ambitions and the probable actual effects of economic policies.

• Macroeconomic data sources
• Economic growth
• Interest and currency rates
• Business cycle theory
• Monetary policy
• Fiscal policy
• Public budgets
• Pensions
• Asset bubbles and financial crises in an international perspective
• Financial stability
• Macroeconomic forecasts
• Applied econometrics
• Time series analysis

Recommended use of time: