SØK 1301 Macroeconomics and Economic Application
SØK 1301 Macroeconomics and Economic Application
This course provides an introduction to macroeconomic analysis. Particular emphasis is placed on business cycles and monetary and fiscal policy, which complements the focus on economic growth in the course "Sustainable economic development". The students will be introduced to the measurement of macroeconomic variables and national accounts. A main objective is to give students a deeper academic insight into how monetary policy and fiscal policy work in the short term in a small open economy such as Norway. This includes an understanding of flexible inflation targeting in monetary policy and the use of petroleum revenues in fiscal policy. In addition, explanations for unemployment of a short-term and long-term nature will be emphasised. The course will also go into topics such as automation and financial crises. An overall goal is for the students to understand traditional thinking about short-term economic fluctuations and stabilization policies, and be able to link this to considerations of efficient resource utilization over time in a small open economy.
After completing the course, the students should have insight into:
- Basic macroeconomic concepts including main variables and relationships in the national accounts.
- The conventional frameworks for understanding why economic activity fluctuates over time as a result of supply and demand conditions in a small open economy.
- How inflation is affected by the state of the economy, expected inflation and cost shocks.
- How monetary policy affects the economy in the short term, and conventional theory for the conduct of monetary policy under inflation targeting in an open economy such as Norway.
- Fiscal policy objectives and instruments, with particular emphasis on the Norwegian situation where the management and use of oil and gas revenues are central. This includes the effects of using natural resource revenues on the real exchange rate and industrial structure, which is a topic of a long-term nature.
- Explanations of why unemployment occurs, persists and fluctuates over time.
- How the efficient use of society's resources can change over time as a result of changes in the environment, such as technology, international interest rates, or natural resource wealth.
After completing the course, students should be able to:
- Give an account of the main macroeconomic concepts, indicators and key objectives and instruments for Norwegian economic policy.
- Use digital tools and applications (such as online databases and Excel) to extract and analyze information about the macroeconomic situation.
- Uncover the key trade-offs in short-term monetary and fiscal policy in the face of external shocks.
- Analyse the key trade-offs in short-term monetary and fiscal policy in the face of external shocks.
- Analyze cyclical movements in a small open economy, based on models of aggregate supply and demand where exchange rates are determined below uncovered interest rate parity.
- Evaluate the relationship between fiscal policy objectives and instruments, including analysing the most significant long-term effects of fiscal policy measures.
After taking this course, students should be aware of inherent goal conflicts and trade-offs in macroeconomic policy. They should be able to assess both national and international macroeconomic issues from different perspectives, including the interests of different groups in society. They should also develop the ability to independently reason about the likely effects of macroeconomic policies in practice, and whether these are consistent with the ambitions announced by authorities and stakeholders. The students should be able to understand the traditional economic thinking about business cycles and short-term stabilization policies, the uncertainty and knowledge gaps that actually exist regarding macroeconomic fluctuations, and see this approach in relation to what constitutes efficient use of resources over time when the environment changes.
- National accounts and main economic variables
- Model-based analysis of short-term fluctuations in economic activity.
- Monetary and fiscal policy under fixed and flexible exchange rates.
- The relationship between economic activity, expectation formation, and inflation.
- Monetary policy under flexible inflation targeting.
- Fiscal policy: Objectives and instruments. Use of petroleum revenues, the real exchange rate, the flow of resources between the traded and non-traded sectors. Long-term effects of fiscal policy.
- Norwegian macroeconomic developments.
- Unemployment.
- Specific macroeconomic events such as financial crisis, energy shortage, automation, pandemic, or trade conflict.
The course is carried out with 14 lectures of 2 to 3 hours each, a total of 36 hours. In addition, there are additional learning resources in the form of:
- Online resources, largely BI-produced and adapted to the Norwegian context
- Question sets with associated sessions guidance
- Multiple choice tests for each lecture
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The students will be introduced to online databases and will have to download and do simple operations with this data in suitable software, such as Excel.
Higher Education Entrance Qualification
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
This course builds on SØK 3420 Economics I and SØK 1220 Microeconomics, as well as other courses in mathematics, statistics, and business administration given in the first 5 semesters of the programme.
| Assessments |
|---|
Exam category: Submission Form of assessment: Structured Test Exam/hand-in semester: First Semester Grouping: Individual Duration: 72 Hour(s) Comment: Mid-term exam: The test is posted with 3 days to take it. From the time you open the test until you finish it, you will have 2 hours to complete. Exam code: SØK 13011 Grading scale: Pass/fail Resit: Examination every semester |
Exam category: School Exam Form of assessment: Written School Exam - pen and paper Exam/hand-in semester: First Semester Weight: 100 Grouping: Individual Support materials:
Duration: 5 Hour(s) Exam code: SØK 13012 Grading scale: ECTS Resit: Examination every semester |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Teaching | 36 Hour(s) | |
Prepare for teaching | 14 Hour(s) | |
Student's own work with learning resources | 123 Hour(s) | |
Digital resources
| 10 Hour(s) | |
Examination | 7 Hour(s) | |
Feedback activities and counselling | 10 Hour(s) |
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.
