APPLIES TO ACADEMIC YEAR 2016/2017 Norwegian version

SØK 3432 Macroeconomics

Responsible for the course
Terje Synnestvedt, Hans-Martin Straume

Department
Department of Economics

Term
According to study plan

ECTS Credits
7,5

Language of instruction
Norwegian

Introduction
Macroeconomics is the study of the economy as a whole. It deals with phenomena such as long-run economic growth, business cycles, unemployment, inflation, and deficits on the balance of payments. Analyses on how governments and central banks can influence the macroeconomy through fiscal and monetary policy are particularly important in macroeconomics.

Learning outcome
An important goal of this course is to familiarise students with important macroeconomic concepts, indicators, and relations, and to give students insights into macroeconomic theories (with corresponding empirical knowledge) of long-run economic growth processes, structural unemployment, inflation and other nominal variables, and business cycles. This will help you to understand how small, open economies are affected by the international economy, and important economic policy issues confronting governments and central banks. Another goal is to equip students with sufficient knowledge to understand theories and macroeconomic models that explain how fiscal and monetary policy, such as inflation targeting, can be used to influence the macroeconomy.

Acquired knowledge
After taking this course you should understand and be able to explain important macroeconomic concepts, indicators and the most common policy targets and instruments of fiscal and monetary policy in advanced economies. You are expected to understand the crucial distinction between real and nominal variables and concepts. You should also be able to distinguish wrong statements in macroeconomics from correct ones, as well as descriptive statements from normative ones. You should also have acquired a good overview of macroeconomic relations and empirical knowledge. Finally, you should understand the logical structure of basic macroeconomic growth models and elementary models of business cycles and inflation.

Acquired skills
After taking this course you should be able to find relevant economic data and indicators from respectable data sources in order to describe the macroeconomic situation and recent history of a particular country. You should also be able to decide which macroeconomic theory or model that is most relevant for a particular policy issue. Finally, you should be able to apply basic models of long-run growth, business cycles and inflation to draw logical conclusions about the effects of changes in crucial parameters and policy instruments.

Reflection
After taking this course you should be ethically conscious about the conflicts of interest and inherent goal conflicts and trade-offs in macroeconomic policy. You should be able to look at a macroeconomic policy issue from different perspectives in regard to the interests of different groups in society. You should also have developed a critical attitude making you conscious of the difference between political ambitions behind announcements of goals and the real effects of macroeconomic policies in practice.

Prerequisites
None.

Compulsory reading
Books:
Steigum, Erling. 2004. Moderne makroøkonomi. Gyldendal akademisk. Kap.1-3 og 5-14. Deler av enkelte kapitler er ikke pensum, dette blir mer spesifikt oppgitt ved kursstart.

Other:
Finansdepartementet. 2015. Nasjonalbudsjettet 2016
Keeley, Brian and Patrick Love. 2010. From crisis to recovery. OECD Insights - Publisert på følgende web-adresse:
http://www.oecd-ilibrary.org/docserver/download/0110071e.pdf?expires=1421929265&id=id&accname=guest&checksum=113D529AFEF5186E9396CE97E79C1A37. Chapter 1 - 3 (pages 9 - 49)
Norges Bank. 2016. Pengepolitisk rapport 3/2016
Pensum blir i sin helhet oppgitt ved kursstart


Recommended reading
Books:
Krugman, Paul R.. 2012. End this depression now!. W. W. Norton & Company

Course outline

1. National accounts and economic indicators
2. Economic growth and the wealth of nations
3. The labor market and structural unemployment
4. Money, prices and exchange rates in the long run
5. Consumption and investment
6. Aggregate demand, business cycles and the short-run effects of monetary and fiscal policy
7. Asset bubbles and financial instability
8. Nominal and real exchange rates
9. Long-run effects of fiscal policy.