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
valid for whole curriculum period:
Prerequisites
valid for whole curriculum period:
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