GRA 6639 Business Cycles

GRA 6639 Business Cycles

Course code: 
GRA 6639
Course coordinator: 
Gisle James Natvik
Course name in Norwegian: 
Business Cycles
Product category: 
MSc in Applied Economics
2023 Spring
Active status: 
Level of study: 
Teaching language: 
Course type: 
One semester

This course is a graduate level course in macroeconomics, allowing theory to meet data. More particularly, this course emphasizes economic fluctuations and policies motivated by business cycle fluctuations. Key questions regard whether swings in economic growth and employment are associated with a sustainable use of economic resources over time, in particular the use of labor. Specific attention will be devoted to the macroeconomic effects of swings in oil prices and oil production, both nationally and internationally.

The approach adopted in this course emphasizes the dynamic dimension of interesting applied macroeconomic problems. Participants will be introduced to digital tools used in modern quantitative macroeconomics.

Learning outcomes - Knowledge

This course is organized in a sequence of topics, where we address each topic in detail using both theory and applied methods. The empirical relevance of the different theories will be critically assessed. The course focuses on macroeconomic fluctuations, covering topics such as (i) detrending and stylized facts of business cycles, (ii) advanced theories of the business cycles, in particular real business cycle models and new Keynesian models (iii) (un)employment (iii) the role of monetary and fiscal policy with respect to the business cycle, (iv) oil and macroeconomics

Learning outcomes - Skills

Course participants will develop skills to analyze macroeconomic fluctuations and the role of economic policy, using quantitative macroeconomics.

Course participants will be introduced to tools used in business cycle analysis, in particular the software Matlab. They will be introduced to how quantitative economic models can be solved using Matlab, and how to use these tools to address macroeconomic questions.

Course participants will develop skills to dissect, understand, and present challenging and relevant macroeconomic problems in the real world.

General Competence

The students will be exposed to current macroeconomic theories and their implications for understanding key macroeconomic policy issues, as well as the practical tools used for macroeconomic analysis.

Course content

1. Stylized facts of business cycles

  • Measuring business cycles - some methods to detrend data
  • Computing business cycle statistics
  • Using facts to discipline and distinguish models

2. Introduction to advanced theories of business cycles - quantitative macroeconomics

  • Real Business Cycle models
  • Solving models numerically (with a computer)

3. Employment

4. New Keynesian models and monetary policy

  • Nominal rigidities
  • New Keynesian Phillips curve
  • Taylor rules

5.  Fiscal policy

  • Ricardian equivalence
  • Neo-classical fiscal multiplier
  • New Keynesian fiscal multiplier
  • Empirical estimates of the fiscal multiplier

6. Commodities and macroeconomics

  • The role of oil price shocks for oil importing and exporting countries
  • Optimal policy for resource rich economies
Teaching and learning activities


Software tools
Additional information

Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.

This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course starts.

At resit, all exam components must, as a main rule, be retaken during next scheduled course.


All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.



Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.

Required prerequisite knowledge

GRA 6634 Advanced Macroeconomics or equivalent

Exam category: 
Form of assessment: 
Group (3 - 4)
Exam code: 
Grading scale: 
Point scale leading to ECTS letter grade
All components must, as a main rule, be retaken during next scheduled course
Exam category: 
Form of assessment: 
Written submission
Support materials: 
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
3 Hour(s)
Written examination under supervision
Exam code: 
Grading scale: 
Point scale leading to ECTS letter grade
All components must, as a main rule, be retaken during next scheduled course
Type of Assessment: 
Continuous assessment
Grading scale: 
Total weight: 
Student workload
Feedback activities and counselling
10 Hour(s)
seminars with problem sets and introduction to matlab
Seminar groups
3 Hour(s)
Group presentations of midterm assignments
Prepare for teaching
24 Hour(s)
Group work / Assignments
10 Hour(s)
Work with midterm assignment (group work) and problem sets
20 Hour(s)
3 Hour(s)
Student's own work with learning resources
54 Hour(s)
36 Hour(s)
Sum workload: 

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.