Macroeconomics II 2400-PP2MA2a
1. Growth Dynamics: The Solow Model. The aim of the lecture is to analyze the determinants of the rate of economic growth under the neoclassical assumption of diminishing marginal product of capital and exogenous technological progress; the aim of discussion is to quantitatively decompose growth rates, analyze the properties of the steady state and to explain differences in the level of income using Solow growth model.
2. New Growth Theories. The aim of the lecture is to analyze the consequences of relaxing the assumption of neoclassical production function and to investigate the sources of technological progress; the aim of discussions is to interpret, using growth theories, determinants of growth found in empirical studies.
3. Consumption and Saving; The Interest Rate and Consumption – The Intertemporal Choice of Consumer; The Life-Cycle and Permanent-Income Hypothesis. The aim of the lecture is to analyze consumptions determinants: interest rate, permanent and current income, wealth, demography and fiscal policy; the aim of discussion is to analyze the determinants of consumption using empirical and analytical examples.
4. Investment The User Cost of Capital; The Desired Capital Stock; Taxes and the Desired Capital Stock; From the Desired Capital Stock to Investment; Investment in Inventories and Housing. The aim of the lecture is to analyze the determinants of private investment expenditures; the aim of discussion is to analyze the determinants of investment using empirical and analytical examples.
5. Government Spending and Its Financing; The Government Budget Constraint; The Evolution of the Debt-to-GDP Ratio; Deficits and Inflation; Cyclically Adjusted Deficit; Ricardian Equivalence. The aim of the lecture is to identify the constraints that excessive debt imposes on fiscal policymaking. The relationship between seigniorage revenue, fiscal policy and monetary policy are also presented; the aim of discussions is to calculate the value of primary surplus required to maintain a stable debt to GDP ratio for various values of real interest rate and GDP growth rates.
6. Monetary Policy: Money Supply Determination; The Conduct of Monetary Policy: Monetary Policy Goals, Central Bank Independence; Interest Rate Rule, Inflation Targeting. The aim of the lecture is to present the objectives and tools of monetary policy; the aim of discussions is to present advantages and weak points of various monetary policy strategies.
7. The Dynamic Aggregate Supply Aggregate Demand Model; Derivation of the DAD-DAS Model From the Static AD-AS Model, the Phillips Curve and the Taylor Rule. The aim of the lecture is to derive the DAD-DAS model and use it to analyze the impact of demand and supply shocks; the aim of discussions is to use the DAD-DAS model to analyze the actual behavior of inflation and output resulting from various shocks.
8. The Role of Financial Development; Financial Development and Economic Growth, Financial Market Imperfections and Macroeconomic Stability. The aim of the lecture is to analyze the role of financial intermediary in the process of economic growth, as well as distortions that the financial market can cause.
Upon the lecture completion, a student:
- is able to identify the determinants of output, unemployment, interest rate, and prices in the short, medium and long run.
- is able to analyze the impact of demand and supply shocks on the economy.
- is able to select an appropriate model to analyze macroeconomic phenomena in different time horizons, different phases of the business cycle and different degrees of nominal rigidities.
- is able to design an optimal monetary and fiscal policy mix aimed at achieving low inflation and output stabilization and predict the consequences of monetary and fiscal policy.
- is able to interpret the empirical relations between macroeconomic variables using theoretical models and on this basis to explain the strength and the responsiveness to external influences of the detected macroeconomic relations.
- is able to describe macroeconomic processes in a formalized way at the intermediate level.
- is able to recognize basic limitations of using theoretical models to explain real-world economic problems.
-is able to meet time-constrained targets through effective planning and organization.
Grades will be based upon a comprehensive final exam (60 marks), mid-term exams (2x14=28 marks) and a presentation (12 marks). The final exam will consist of short essays (analytical problems) and numerical problems. Students will choose 3 out of 4 questions. An exam problem usually combines several topics.
Please note that discussions accompany and do not replace the lecture and students should attend the lectures.
The pass grade is at or above 50 marks and students must earn at least 20 marks on midterms and presentation to be allowed to attend the final exam. There is no possibility to retake presentation.
[A&B]: Abel, A. B. and Bernanke B. S. (2005), Macroeconomics, Pearson Education
[M]: Mankiw, N.G. (2010), Macroeconomics 7th ed., Worth Publishers.
lecture 1: [A&B] ch.6, [M] ch.7;
lecture 2: [A&B] ch. 6, [M] ch. 8;
lecture 3: [A&B] ch. 4, [M] ch. 17;
lecture 4: [A&B] ch.4, [M] ch. 18;
lecture 5: [A&B] ch. 15, [M] ch. 16;
lecture 6: [A&B] ch. 14, [M] ch. 19;
lecture 7: [M] ch. 14;
lecture 8: lecture notes;
Blanchard, O., (2003), Macroeconomics, Pearson Education
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- Ekonomia, niestacjonarne (wieczorowe), pierwszego stopnia
- Ekonomia, stacjonarne, pierwszego stopnia
- Międzykierunkowe Studia Ekonomiczno-Matematyczne, stacjonarne, pierwszego stopnia
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