|Macroeconomics: Business Cycles, Innovation and Growth|
Business cycle, economic growth, inflation, employment, unemployment, interest rate, macro-economic policyPosition of the Course
Macroeconomics study the behaviour of the economy as a whole. This includes analysis of the business cycle, long-run economic growth, inflation, unemployment, etc. Our main objective in “Advanced macroeconomics I” is that students master key developments in macroeconomics during the last 25 to 30 years: new-classical macroeconomics, modern business cycle analysis, more advanced topics of long-run growth and development, relatively recent game theoretic applications in macroeconomics.Contents
New-classical macroeconomics: rational expectations (+ applications), policy implications Modern business cycle analysis new-classical approach: ‘real business cycle’ theory modern new-Keynesian approach: imperfect competition, real and nominal rigidity empirical research into the causes and characteristics of the business cycle (VAR-analysis) Advanced analysis of inflation and unemployment Monetary policy, inflation, interest rates and exchange rates: the long-run relations; Interactions between fiscal policy, monetary policy and inflation / hyperinflation; Game theoretic aspects of macroeconomics, institutions and macroeconomic performance: time inconsistency, the Barro-Gordon model, commitment, credibility and reputation, monetary institutions and inflation, structural and institutional determinants of unemployment (Calmfors-Driffill model). The new Phillips curve The theory of long-run economic growth: the Solow model, the convergence debate, ‘augmented’ Solow models, endogenous growth theory, the model of overlapping generations, empirical research on the determinants of GDP per capita in the long-run. The method of analysis in this course is graphical-intuitive as well as formal. As to formal methods, various models are analysed (model with rational expectations, real business cycle model, endogenous growth models, Diamond model of overlapping generations)Starting Competences
Students should have mastered a good basic macroeconomics course, including the IS-LM-BP-model (Mundell-Fleming model) and the AD-AS-model, the Phillips-curve. Knowledge of the Solow model of long-run growth is recommended.Final Competences
Know the basic assumptions and policy implications of new-classical macroeconomics. Be able to show these (policy) implications in specific situations;
Textbook : Heylen, F., 2004, Macro-economie, Garant, Antwerpen-Apeldoorn, ch. 15-21. The book can be obtained in the beginning of the academic year at the “Vakgroep Sociale Economie”. Price is 43 euro.
Students can get help, explanation and coaching from an assistant. If necessary the responsible teacher can also be contacted for additional explanation.
Ex-cathedra teaching with plenty of room for interaction with students and discussionEvaluation Methods
End-of-term evaluation (100%).Examination Methods
Written examination and oral examination (with written preparation).