Macroeconomics

Aim

On completion of the course, the student should be able to - reproduce the historical development of macroeconomic ideas, criticism and contemporary controversies in a general way. - describe what the central macroeconomic problems consist of and why they are considered important. - define important concepts in the macroeconomic field. - explain how the important macroeconomic variables are determined in the short and long term and their mutual dependency. - analyse the effects of disturbances, economic policy and stabilisation policy. - assess the possibilities and limitations of economic policy. - evaluate an economic position and assess a future development. - understand the specific problems that apply to small open economies of the Swedish type.

Content

The aim of the course is to develop the student's knowledge of relevant concepts, actual relations and macroeconomic theory. This should give an ability to interpret information about macroeconomic conditions and the ability to apply this knowledge in analyses of the development in the macroeconomic field under different circumstances. The course begins with an overview of important macroeconomic concepts and issues. This includes that the national accounts and concepts related to financial economics and foreign transactions are covered. The macroeconomic objectives concerning growth, inflation, unemployment and employment are discussed. The economic growth in the long run is explained based on neoclassical theory, endogenic growth theory and institutional theory. The labour market and the problem of unemployment are studied. After that, the role of money in a market economy and the theory of what determines the price level and exchange rate for a country in the long run are covered. From then on, the course focuses on what relates to fluctuations in business activity, i.e. how GDP, inflation and unemployment is determined in the short and medium terms. The basic so-called Keynesian theory constitutes the basis for determining equilibrium between aggregate supply and demand. The factors that determine the supply and demand and their co-relations are covered. After that, the theory is developed to apply to an open economy and an economy with a variable price level and inflation expectations. The final part of the course covers the possibilities and problems of carrying out economic policy, mainly stabilisation policy with the aim of lessening the fluctuations in business activities. The student is then given the chance to relate the macroeconomic theory to various current issues. The historical development of the Swedish economy and current economic position is also touched upon in the course. The development of different macroeconomic schools and theorisings is also covered to some degree.