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.

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.