Please note! Course description is confirmed for two academic years, which means that in general, e.g. Learning outcomes, assessment methods and key content stays unchanged. However, via course syllabus, it is possible to specify or change the course execution in each realization of the course, such as how the contact sessions are organized, assessment methods weighted or materials used.

LEARNING OUTCOMES

Students understand key macroeconomic concepts and can use basic models of economic growth, labour markets and goods and money markets to analyse the effects of monetary and fiscal policies on key macroeconomic variables.

Credits: 5

Schedule: 09.01.2024 - 20.02.2024

Teacher in charge (valid for whole curriculum period):

Teacher in charge (applies in this implementation): Nigel Mcclung

Contact information for the course (applies in this implementation):

This is the first half of the Intermediate Macroeconomics course at Aalto. The course covers long-term developments and structural aspects of the economy.

This course will be taught by Nigel McClung (Bank of Finland).  The course assistant is Henni Puhakka (henni.puhakka (at) aalto.fi).

An outline of the course can be found below and in syllabus.

Lectures are held Tuesdays at 15.15-17.00 in Undergraduate Centre, U1 VALMET - U154 starting January 9, and Thursdays at 15.15-17.00 in Undergraduate Centre, U3 - U141. Exercise sessions are held on Wednesdays at 10.15-12.00 in Undergraduate Centre, U3 - U141, starting January 17.

Final course grade will be based on an exam (50%), problem sets (40%) and a case write-up (10%). In order to pass the course, the student must obtain at least 50% of the maximum total points for the problem sets. Only the four problem sets (out of 5 in total) with the highest points will be taken into account for the course grade and the 50% minimum requirement.


CEFR level (valid for whole curriculum period):

Language of instruction and studies (applies in this implementation):

Teaching language: English. Languages of study attainment: English

CONTENT, ASSESSMENT AND WORKLOAD

Content
  • valid for whole curriculum period:

    Key macroeconmic concepts and models e.g. national accounting, long-run growth, wages and unemployment, interest rates, goods and money markets, IS-TR-IFM-model.

  • applies in this implementation

    • OUTLINE (subject to changes)

    • Capital accumulation, technological progress, and the labor share of output

      ·        Solow growth model

      ·        Competitive capital and labour markets

      ·        Structural change

      Related book chapter (Burda&Wyplosz, 7. ed.): 3

      Externalities, imperfect competition, and growth

      ·        Endogenous growth, AK-model

      ·        Automation/robotisation

      ·        Climate and the macroeconomy, intro to IAMs

      Intertemporal choices

      ·        Intertemporal budget constraints

      ·        Consumption smoothing

      ·        Ricardian equivalence

      ·        Bond prices and interest rates

      ·        Cost of owner housing

      Related book chapters: 6-8

      Labour supply decisions and labor market flows

      ·      Income taxation vs. lump-sum taxation

      ·      Job creation, job destruction, and unemployment

      Related book chapter: 4

      Demographics, growth, and social security

      ·        Two-period OLG model

      ·        PAYG vs. fully funded social security

      ·        Dynamic (in)efficiency

      Money, nominal price level, and exchange rates

      ·        Quantity theory of money

      ·        Zero lower bound and the liquidity trap

    • ·        Purchasing power parities

      ·        Nominal and real exchange rates

      Related book chapter: 5

      Banks and money creation

      ·        Bank’s balance sheet

      ·        Lending and money creation

      ·        Limits to money creation

      ·        Bank runs and bank regulation

      ·        Quantitative easing

      Related book chapters: 9-10


Assessment Methods and Criteria
  • valid for whole curriculum period:

    Exam, exercises

  • applies in this implementation

    Final course grade will be based on an exam (50%), problem sets (40%) and a case write-up (10%). In order to pass the course, the student must obtain at least 50% of the maximum total points for the problem sets. Only the four problem sets (out of 5 in total) with the highest points will be taken into account for the course grade and the 50% minimum requirement.

Workload
  • valid for whole curriculum period:

    lectures, exercises and preparation

DETAILS

Study Material
  • applies in this implementation

    Study Material
    • Burda&Wyplosz, Macroeconomics a European text, Oxford University (optional)

    • The course material consists of lectures slides, problem sets and selected chapters (see the outline above) of the textbook (Burda&Wyplosz). Some topics are not included in the textbook. Also the lectures complement the lecture slides in many ways. For instance, in the lectures we often draw graphs that are not in the lecture slides.



Substitutes for Courses
Prerequisites
SDG: Sustainable Development Goals

    8 Decent Work and Economic Growth

FURTHER INFORMATION

Further Information
  • valid for whole curriculum period:

    Teaching Language : English

    Teaching Period : 2022-2023 Spring III
    2023-2024 Spring III