Macroeconomic Theory and Politics

Aim

On completion of the course, the student should in advanced level be able to - formulate, explain and analyze models for economic growth - explain and analyze how economic growth depends on underlying determinants - analyze causes and consequences of business cycle fluctuations - explain and analyze macroeconomic models for open economies engaged in international trade in goods and capital, taking various exchange rate regimes into account - explain and analyze the adjustment processes taking place from the short run and long run - explain and analyze the main macroeconomic policy areas.

Content

The course focuses both on short and long run macroeconomic issues with a focus on business cycles, growth and public debt. The models are applied to descriptions of the problems encountered by politicians and central banks when creating the institutional settings for economic policy and when applying fiscal and monetary policies. Economic growth is crucial for long term standards of living and thus a crucial element of macroeconomic analysis. The course set-up and analyze models of economic growth being consistent with stylized facts of economic growth. Throughout, the theoretical analyses are exemplified with studies of current economic-political problems. Course subject areas are: Keynesian business cycle models for open economies, economic policy (fiscal and monetary policy), endogenous economic policy and the institutional settings of economic policy, long run economic growth, public budget and public debt.