SØK 1201 Macroeconomics I
Macroeconomics is the study of a country's economy as a whole. The subject deals with phenomena such as sustained economic growth, including both immediate and fundamental causes, cyclical fluctuations and economic crises, unemployment, inflation and balance of payments. Analysis of how the government can improve macro-economic development through fiscal policy, monetary policy, and structural policy (rules and institutions) is very important in this field.
Macroeconomics I focuses on essential terminology and relationships, and long run economic growth and development. Macroeconomics I is a foundation for the course Macroeconomics II, which is more concerned with business cycles and economic stabilization policy. The course requires mathematical skills at the level of the bachelor program in business.
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, inside a given country, and internationally (across countries).
- Acquired an overview of key population issues (demographics) and gained insight into how macroeconomic growth processes related to the growth in physical and human capital, as well as productivity growth.
- Acquired 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 the long run consequences of fiscal policy.
After completing the course, students will be able to:
- Explain the main macro-economic concepts, indicators and key objectives and instruments of Norwegian long-term 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 patterns.
- Use digital tools and applications (like online databases and Excel) to extract and analyze information about macroeconomic measures.
- 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, digitalization, and innovation for economic growth, the fundamental institutional and political causes of high material wealth, and the long-run effects of fiscal policy.
- Identify relevant economic indicators and other data from macroeconomic data sources to shed light on the macroeconomic development in Norway, in other countries, or internationally (across countries).
- Determine which macroeconomic theory that are most relevant to discuss a specific, long-run issue.
- Use the 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 macroeconomic models in mathematical form to study effects of fiscal policy for economic growth and sustainability.
Students must be ethically aware of the fundamental conflicts of interest and conflicting objectives that are linked to economic policy, nationally and internationally, including concerns for the environment and sustainability. They should consider a macroeconomic problem from different angles when it comes to different groups of economic interests. They will also get a critical sense of the declared political goals and aspirations may differ from the actual effects of economic policy in practice.
1. National accounts and economic indicators
2. Population development, population trends, and long-run sustainability.
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, digitalization, 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, economic growth, and long-run sustainability.
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, nationally and internationally.
12. Long run effects of fiscal policy.
The course consists of 36 hours of lectures and 6 hours of exercises plenary review.
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
This course requires prior knowledge of mathematics (MET 1180 Part I and II), statistics (MET 1190), business (BØK1121) and microeconomics (SØK 1101) or equivalent.
|Exam category||Weight||Invigilation||Duration||Support materials||Grouping||Comment exam|
Form of assessment:
Internal and external examiner
Examination every semester
|Form of assessment:||Written submission|
|Support materials:|| |
|Resit:||Examination every semester|
Feedback activities and counselling
Student's own work with learning resources
Group work / Assignments
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 7,5 ECTS credit corresponds to a workload of at least 200 hours.