Syllabus

LEARNING OUTCOMES

The course develops central areas of macroeconomic theory that are useful for analysis and discussion of policy making. The policy topics covered include foundations of unconventional monetary policies e.g. quantitative easing, the role of financial markets in the recent crisis, current problems and topics in the Euro area and issues in long-term economic growth. Students learn the motivations for policy analysis, become familiar with current policy concerns and acquire analytical skills for assessing these problems.

Credits: 6

Schedule: 08.01.2024 - 21.02.2024

Teacher in charge (valid for whole curriculum period):

Teacher in charge (applies in this implementation): Peter Matthews

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

Peter Hans Matthews X310

peter.matthews@aalto.fi

Office Hours: After MW Lectures, or by appointment

Tuomas Markkula (TA)

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:

  Formulation and use of New Keynesian models for policy making and analysis, role of financial and labor markets in macroeconomic fluctuations, the Great Recession and the problem of very low interest rates, theory of fiscal and monetary policy, analysis of long-term growth and development.

• applies in this implementation

  
  

  This course builds on the traditional intermediate macroeconomics course, to provide students with a more sophisticated, but policy-oriented, perspective on the short and medium run behavior of the OECD economies including, of course, Finland.  It includes careful attention to the micro-foundations of macroeconomic relations; a focus on the canonical new Keynesian model, a policy workhorse; an emphasis on labor and financial market institutions and their macroeconomic implications; and a more detailed treatment of international trade in goods, services and assets.

  
  

Assessment Methods and Criteria

• valid for whole curriculum period:

  50% Exam
  50% Assignment

• applies in this implementation

  
  

  Grades will be based on five problem sets (40 points) and a final exam (60 points).  You need to earn a minimum of 50 points to pass the course.

  The problem sets will be distributed via myCourses and will be submitted there on five successive Mondays, from 15 January to 12 February.  Discussions on Thursdays will be led by Tuomas Markkula and will review the just submitted problem and provide guidance on the next one due, among other things.

  You are welcome to bring laptops to look at lecture slides as we discuss them but given the negative externalities (Sana et al, 2013, and others), for no other purpose.

  
  

Workload

• valid for whole curriculum period:

  Contact teaching 24h
  Exercises 14h
  Essay 35h
  Exam preparation and independent study 84 h
  Exam 3h 
  TOTAL 160h (ECTS)

• applies in this implementation

  N/A
  

DETAILS

Study Material

• applies in this implementation

  
  

  Almost all course reading comes from Wendy Carlin and David Soskice, Macroeconomics: Institutions, Instability and the Financial System.  Oxford University Press, 2015. 

  Other readings will be distributed online.

  
  

Substitutes for Courses

• valid for whole curriculum period:

  Substitutes for Courses

Prerequisites

• valid for whole curriculum period:

  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

Details on the schedule

• applies in this implementation

  
  

  Schedule

  
  

  08.01               Introduction/Review of Demand Side

                          Carlin and Soskice, Chapter 1

   

  10.01               Demand Side, Continued

                          Carlin and Soskice, Chapter 1

   

  11.01               Exercise/Discussion Section

   

  15.01               Labor Markets and Pricing Behavior

                          Carlin and Soskice, Chapter 2

                          Problem Set 1 Due

   

  17.01               Labor Markets and Pricing Behavior, Continued

                          Carlin and Soskice, Chapter 2

   

  18.01               Exercise/Discussion Section

   

  22.01               The Three-Equation (New Keynesian) Model and Policy Implications

                          Carlin and Soskice, Chapter 3

   Problem Set 2 Due

   

  24.01               The Three-Equation Model and Policy Implications, Continued

                          Carlin and Soskice, Chapter 3

   

  25.01               Exercise/Discussion Section

   

  29.01               Money and Banking

                          Carlin and Soskice, Chapter 5

                          Problem Set 3 Due

   

  31.01               Financial Sector and Crises

                          Carlin and Soskice, Chapter 6

   

  01.02               Exercise/Discussion Section

   

  05.02               The Three Equation Model in Open Economies

                          Carlin and Soskice, Chapter 9

   Problem Set 4 Due

   

  07.02               The Three Equation Model in Open Economies, Continued

                          Carlin and Soskice, Chapter 9

   

  08.02               Exercise/Discussion Section

   

  12.02               Demand Side, Labor Markets and Pricing in Open Economies

                          Carlin and Soskice, Chapter 10

                          Problem Set 5 Due

   

  14.02               Eurozone

                          Carlin and Soskice, Chapter 12

   

  15.02               Wrap Up!

              

                          

  
  

Description