Course syllabus - Macroeconomic Theory

Objectives

Macroeconomics is the study of the economy as a whole. To achieve this, the economy is viewed as a system of a few highly aggregated and interacting markets. The course aims to present the main questions of macroeconomics, with particular emphasis on those facing a small open economy, and the answers provided by modern macroeconomic theory. These questions typically concern the causes and effects of economic change, such as growth and structural change in the long run as well as business cycles in the shorter time horizon.

Learning outcomes

After completed course the student should be able to
- use modern macroeconomic models to describe the workings of closed as well as open economies
- compute and interpret equilibrium values (steady state) of key economic variables such as production, consumption, investment, employment  in such models
- compute, describe and interpret the adjustment path toward steady state of key economic variables in dynamic models
- analyze how an economy's production technology combines with productive resources such as capital and labor to determine long run output, and how changes in these factors contribute to economic growth
- analyze determinants of international trade between open economies, and calculate effects from trade on the rest of the economy in modern macroeconomic models of open economies
- describe the role of exchange rates in such economies
- analyze the effects of various forms of economic policy on the long run steady state as well as on the adjustment path in the short and intermediate term in dynamic macroeconomic models

Course content

The course describes how the production technology in combination with available productive resources determine production and income in an economy, and  analyzes how consumers, firms, the government, and the international economy interact on markets for goods, labor, physical and financial capital, and currencies. Models are developed for aggregate analysis of each of these markets and their interdependences. The theories presented deal with output determination, capital formation, consumption, savings, employment, unemployment, international trade, interest rates and exchange rates. The role of the government is analyzed and the scope for relevant economic policy discussed. The emphasis is on the long run development of the economy, such as causes and effects of economic growth and the structure of international trade, but the short and intermediate time horizon with adjustment and business cycles are also treated. A theme in the course is how macroeconomic relationships are founded in microeconomic analysis.

Tuition

Lectures and applied demonstrations and exercises. The exercises, which focus on applying and solving economic models, may be held in connection with the lectures or as separate application seminars.

Specific requirements

Economics 45 credits with gradual progression; at least 30 credits at G1N and at least 15 credits at G1F. In addition the course requires Engelska 6.

Examination

Examination (TEN1), 7,5 credits, grades Excellent (A), Very good (B), Good (C), Satisfactory (D), Sufficient (E), Insufficient (F)

A student who has a certificate from MDU regarding a disability has the opportunity to submit a request for supportive measures during written examinations or other forms of examination, in accordance with the Rules and Regulations for Examinations at First-cycle and Second-cycle Level at Mälardalen University (2020/1655). It is the examiner who takes decisions on any supportive measures, based on what kind of certificate is issued, and in that case which measures are to be applied.

Suspicions of attempting to deceive in examinations (cheating) are reported to the Vice-Chancellor, in accordance with the Higher Education Ordinance, and are examined by the University’s Disciplinary Board. If the Disciplinary Board considers the student to be guilty of a disciplinary offence, the Board will take a decision on disciplinary action, which will be a warning or suspension.

Grade

AF-skala

Interim Regulations and Other Regulations

The course replaces NAA302 Macroeconomic Theory and NAA205