Macroeconomic Policy and Performance

Overview

The course opens with a brief tour of the global economy. This is followed by a discussion of the meaning and measurement of the main macroeconomic variables: output, unemployment, inflation and growth. The goods and financial markets and the concept of macroeconomic equilibrium are introduced. The IS/LM model is used to analyse the effectiveness of fiscal and monetary policy in the medium term. Aspects of the labour market are then considered followed by the introduction of the aggregate demand and aggregate supply model. The final third of the course is devoted to a discussion of factors contributing to the long run growth of the economy. The topics covered include: the Solow model of economic growth; growth accounting; factors contributing to total technological change and total factor productivity and the role and regulation of foreign direct investment.

Learning Objectives

Knowledge and Understanding
On completion of the course, students should have greater familiarity with salient features of the macroeconomic environment. They should understand the main determinants of aggregate output in a monetary economy in the short, medium and long-run. They should have an understanding of the factors contributing to growth and development as well as to fluctuations in macroeconomic performance. Students should understand government’s role in the economy and be able to analyze the effect of different policy interventions.

Skills

Intellectual Skills

Students will gain knowledge and understanding of aspects of macroeconomic theory and development theory. They will become aware of competing views on the role of governments and markets. They will develop the ability to search for and interpret empirical evidence and bring it to bear on policy issues. They will gain experience in weighing evidence, developing policy options and outlining the pros and cons of these options.

Practical Skills
Students will develop their oral and written communication skills as well as their awareness of how economic policy can impact on business.

Assessment

Students must achieve an overall mark of 40% in the module to pass