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Module Code - Title:

EC4112 - MACROECONOMICS (FOR NON-BUSINESS)

Year Last Offered:

2020/1

Hours Per Week:

Lecture

2

Lab

0

Tutorial

1

Other

0

Private

7

Credits

6

Grading Type:

N

Prerequisite Modules:

EC4102

Rationale and Purpose of the Module:

The purpose of this module is to introduce the student to the principles underlying the macroeconomy. This is the study of how aggregate economic variables such as, the real growth rate, inflation and unemployment, behave and how the government and central bank can influence their behaviour. The first part of the course deals with key topics such as the theory of income determination, the consumption function and fiscal policy as well as the foreign exchange market. The latter part examines monetary policy instrument including how interest rates are determined and how monetary policy is conducted by the European Central Bank. The benefits and costs of economic and monetary union are also addressed in this introductory macroeconomics module.

Syllabus:

1. GNP, business cycle, unemployment, inflation. Policy constraints; 2. The Theory of Income Determination: Basic Model , The aggregate supply and demand model: Three issues: including demand and supply-side shocks, Okuns law, Natural real GNP and automatic adjustment mechanisms. 3. The Consumption Function and Income Determination including disposable income, consumption and saving; Keynesian multiplier; average and marginal propensity to consume. 4. Fiscal Policy and the Business Cycle Stabilisation policy, fiscal policy in Ireland 5. Money and Banking Definitions; types of money; modern banking systems; money creation, money multiplier; instruments of monetary policy. 6. The Price Level and Money Supply and the quantity theory of money and implications. 7. Interest Rate Determination. Monetary policy; demand for money; money market equilibrium, monetary policy and the Keynesian, Classical debate. 8. The Balance of Payments and Exchange Rate Theory. Foreign exchange market, flexible exchange rates, real exchange rates, trade-weighted exchange rate index, Central Bank intervention, external reserves, fixed exchange rates. 9. Purchasing power parity including absolute and relative PPP. 10. Fixed Exchange Rate Systems including the operation of fixed exchange rate systems; monetary adjustment mechanism; sterilisation; fixed exchange rate systems in the past; benefits and costs 11. European Monetary Union including economic benefits and costs to Ireland; adjusting to economic shocks 12. The European Central Bank The design of the ECB; price stability; central bank independence; monetary policy in EMU.

Learning Outcomes:

Cognitive (Knowledge, Understanding, Application, Analysis, Evaluation, Synthesis)

Learning outcomes for this module, upon successful completion include the ability to: Understand the key principles underlying the macroeconomy; Investigate how aggregate variables such as inflation and unemployment behave and how the government and the European Central Bank can influence their behaviour; Extract valuable lessons and assess the importance and impact of fiscal and monetary policy.

Affective (Attitudes and Values)

Learning outcomes for this module, upon successful completion include the ability to: Discuss the operation of foreign exchange markets and the concept of purchasing power parity; Show how the single currency has impacted the Irish and international economy.

Psychomotor (Physical Skills)

Learning outcomes for this module, upon successful completion include the ability to: Construct an economic profile of a selected country

How the Module will be Taught and what will be the Learning Experiences of the Students:

Module will be thought by interactive lecture and experential tutorial. Student learning experiences will be gauged through problem sets and readings as well as feedback during and after classes. Students will have access to lecture materials on public folder

Research Findings Incorporated in to the Syllabus (If Relevant):

not applicable

Prime Texts:

Leddin, Anthony and Brendan M. Walsh (2003) The Macroeconomy of the Eurozone , Gill and MacMillan

Other Relevant Texts:

Dornbusch R. S. Fischer and R. Startz (2002) Macroeconomics , McGraw-Hill

Programme(s) in which this Module is Offered:

Semester - Year to be First Offered:

Spring - 08/09

Module Leader:

rita.buckley@ul.ie