Topic outline

  • General

    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 Arttu Kahelin (arttu.kahelin (at) aalto.fi).

    An outline of the course can be found in the syllabus (see link in the side panel).

    Lectures are held Tuesdays at 15.15-17.00 in Otakaari 1, lecture hall U1 starting January 10, and Thursdays at 15.15-17.00 in Otakaari 1, lecture hall U3. Exercise sessions are held on Wednesdays at 10.15-12.00 in Otakaari 1, lecture hall U3, starting January 18.

    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.

    Zulip: https://macro1-2023.zulip.aalto.fi/join/p7qlfe5nuthj6ry2vcm6lk5j/

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      • 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