Autumn 2023Spring 2024
The course will give the students an overview of key macroeconomic relationships and provide insight into the use of models to analyze these relationships in an open economy.
The first part of the course covers central macroeconomic models of economic growth (Solow, Solow-Romer).
The labor market, an important factor market, is discussed in detail where we also focus on institutions and settings in the European and the Norwegian labor markets.
The course also addresses fluctuations in production and employment. Money, prices and inflation are introduced and discussed. The IS curve is derived with a special focus on consumption and investment behavior. Then monetary policy and the monetary policy (MP) curve are introduced. The supply side of the economy is introduced through the Phillips curve. The investment-savings (IS) curve, the MP curve and the Phillips curve are finally put together in a complete model of the aggregate economy, the so-called AS-AD model.
With these buildings blocks, topics such as fiscal policy, monetary policy, the financial crisis, international trade and exchange rates are analyzed and discussed.
The course addresses issues of high relevance for both the Norwegian and the international economy.
On completing the course, the student will:
- Know national accounts and understand how different transactions are posted in the national accounts and foreign accounts
- Understand key mechanisms behind economic growth
- Recognize macroeconomic fluctuations and the importance of expectations and frictions
- Understand possible effects of monetary and fiscal policy
- Understand how the macroeconomic models relate to the Norwegian and international reality
- Be able to analyze key mechanisms for economic growth, including the role of certain policy measures
- Be able to use a model to describe how the economy is affected by supply and demand shocks
- Be able to use a model to describe effects of fiscal and monetary policy
- Be able to use the models to analyze the effects of certain macroeconomic shocks in Norway and internationally
- Obtained an ability to understand key macroeconomic conditions, to participate in discussions on macroeconomic questions and with simple words be able to explain key macroeconomic mechanisms
- Know the challenges and possible solutions to long-term sustainability goals related to the welfare state, public finances and climate.
- ECTS Credits