The course aims to provide students with insight into macroeconomic mechanisms and relationships that are important for the Norwegian economy and economic policy, both in the short and long term. Emphasis will be placed on the interaction between financial markets, monetary and fiscal policy, and business cycle fluctuations. Monetary policy decisions made by the central bank and issues related to fiscal policy will be discussed. Through the discussion of important and current macroeconomic issues such as macroeconomic instability, financial crises, the use of oil revenues, and economic globalization, the course emphasizes connecting theoretical understanding with key macroeconomic phenomena and developments.

Upon completing the course, students should have an understanding of:

• The interaction between the real economy, money market, foreign exchange market, and labor market, and be able to explain the possible effects of economic policy on key variables such as aggregate output, consumption, unemployment, inflation, and the trade balance.
• How business cycle fluctuations can spread between countries and regions.
• The meaning and importance of financial stability and be familiar with government tools used to maintain financial stability.
• The short-term and long-term effects of using oil revenues in the Norwegian economy, as well as an understanding of fundamental issues related to public budgets.