APPLIES TO ACADEMIC YEAR 2014/2015

SØK 1201 Macroeconomics I

Responsible for the course
Jørgen Juel Andersen

Department
Department of Economics

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
Macroeconomics is the study of a country's economy as a whole. The subject deals with phenomena such as sustained economic growth, cyclical fluctuations from year to year, unemployment, inflation and balance of payments. Analysis of how the government can stabilize the macro-economic development through fiscal policy and monetary policy is very important in this field. Macroeconomics is a foundation for the course Macroeconomics II.

Learning outcome
Acquired Knowledge
After completing the course, students will have:

• Acquired a precise vocabulary and understanding of macroeconomic theories and their empirical knowledge that explains the long-term growth processes, permanent (structural) unemployment, inflation and growth in other nominal sizes as well as business cycles.
• Learned how the Norwegian economy is affected by international factors and the economic indicators, which contains the latest information about the current economic situation.
• Acquired an overview of key population issues and gain insight into how macroeconomic growth processes related to the growth in physical capital and human capital, and productivity growth.
• The accumulated knowledge of the properties of the aggregate production function, and how the Solow growth model can be applied to the dynamic analysis of economic growth in the long term.
• Learned about sustainable economic growth that takes into account non-renewable natural resources and the environment.
• Established knowledge of current macroeconomic models where the economic situation is influenced by demand shocks and government fiscal policy.

• Explain the main macro-economic concepts, indicators and key objectives and instruments of Norwegian economic policy.
• Explain the fundamental distinction between the real economy on the one hand and money and other nominal variables on the other.
• Distinguish between correct and incorrect statements related to normative and descriptive statements on the macroeconomic field.
• Demonstrate good overview of the macroeconomic context and empirical knowledge.
• Understand the logical structure to the Solow model of capital accumulation and economic growth in the long term
• Show understanding of the importance of technological change and innovation for economic growth, the fundamental institutional and political causes of high material wealth, the driving forces behind business cycles, and the effects of fiscal policy.
• Identify relevant economic indicators and other data from macroeconomic data sources to shed light on the macroeconomic situation in Norway or other countries.
• Determine which macroeconomic theory that are most relevant to discuss a specific, relevant issue.
• Make use Solow model of capital accumulation and economic growth in mathematical form.
• Conduct independent reasoning through applications of the Solow model of economic growth, and to use short-term macroeconomic models in mathematical form to study effects of demand shocks, and how fiscal policy affects output and employment through the aggregate demand for goods and services.

Prerequisites
This course requires prior knowledge of mathematics (MET 1180 Part I and II), statistics (MET 1190), business (BØK1121) and microeconomics (SEARCH 1101) or equivalent.

Compulsory reading
Books:
Steigum, Erling. 2004. Moderne makroøkonomi. Gyldendal akademisk. Kapittel 1 - 2 og 5 - 7 (171 sider)
Weil, David N. 2013. Economic growth. 3rd ed., International ed. Pearson Education. Kapittel 1-5, 6 (utenom avsnitt 6.3), 7 (utenom avsnitt 7.2), 8 (utenom avsnittene 8.3 og 8.4 og appendiks), avsnitt 10.1 og 13.1

Other:
Finansdepartementet. 2013. Nasjonalbudsjettet 2014


Recommended reading

Articles:
Brunborg, Helge, Inger Texmoen og Marianne Tønnessen. Befolkningsframskrivninger 2012-2100 : Resultater. Økonomiske analyser. 4/2012. Statistisk sentralbyrå

Course outline
1. National accounts and economic indicators
2. Population development and population trends
3. Long-term economic growth and income distribution between labor and capital.
4. The Solow model of capital accumulation and economic growth in the long term.
5. Human capital, innovations and technological progress.
6. Productivity and efficiency.
7. The importance of political and economic institutions and policy for national income and wealth.
8. Income inequality and economic growth.
9. Natural resources, the environment and economic growth
10. Structural unemployment: frictions in employment market, as well as wage and price setting.
11. Monetary Neutrality: The distinction between the real economy and nominal variables such as money, credit, price levels and exchange rates.
12. Business cycles and short-term macroeconomic models with demand shocks.

Computer-based tools
No specified computer-based tools are required.

Learning process and workload
The course consists of 36 hours of lectures and 6 hours of exercises plenary review.

Coursework Requirements
During the course there will be seven (7) assignments given on the learning platform It's Learning. It is a requirement that students must have received approval for five (5) of these to take the examination. Feedback on assignments will be given both electronically and through reviews in lectures. Information about deadlines for coursework requirements will be provided when the course starts.

Recommended use of hours.