2010-11 academic year

Introduction to Macroeconomics (22098)

Degree/study: degree in International Business Economics
Year: 1st
Term: 2nd
Number of ECTS credits: 6 credits
Hours of studi dedication: 150 hours
Teaching language or languages: English
Teaching Staff: Danilo Guaitoli

1. Presentation of the subject

The course Introduction to Macroeconomics is fundamental in the curricula of IBE, ECO and ADE students. The course aims at introducing you to the main economic questions that economies as a whole face, and to acquire knowledge and competences that will be the fundamentals for your learning of Economic Theory in more advance and specialized courses. This course, together with Introduction to Microeconomics - (the course you have taken during the first quarter), should be viewed as the first step of the training in Economic Theory for IBE, ECO and ADE students.

In the same way as Introduction to Microeconomics helped you understand how households and firms take decisions and interact in different markets, Introduction to Macroeconomics will help you understand how those interactions result in important economic aggregates, how those economic aggregates determine and influence each other, and how they simultaneously affect many households, firms and markets of a country or a set of countries. We will therefore study economic aggregates such as a country's income per capita and economic growth, unemployment, inflation, interest rates, exchange rates and the balance of payments. Furthermore we are going to analyze how economic policy, both monetary and fiscal, affects these economic aggregates.

As you can see, macroeconomics concerns real world problems and it is crucial that you are informed about what is going on in the world around you by regularly reading newspapers and magazines like the Financial Times, the Wall Street Journal, The Economist, Expansión, Cinco Días, or the economic sections of The New York Times, La Vanguardia, el Pais as well as their weekend special sections in economics.

POSITION IN THE CURRICULAR PROJECT

This is a required course of 6 credits in the undergraduate degrees (graus) of IBE, ECO and ADE. It is offered during the second quarter of the first academic year of the three undergraduate degrees (graus).

2. Competences to be attained

GENERAL COMPETENCES

Instrumentals

1. Analytical capabilities (of economic problems with the help of simple economic models).

2. Problem solving (applying simple economic models)

3. Ability to search information independently (on macroeconomic variables - in specified data bases, in the media, etc.).

4. Skills to present and discuss in public.

Interpersonal

1. Social skills to interrelate in small groups during the seminars (participate in discussions, give opinion, listen to views of others, etc.).

Systemic

2. Understand and analyze the economic facts that appear in the press or other media.

3. Skills to carry on individual learning (reading course material, problem solving, search information in the press and other media, etc.)

SPECIFIC COMPETENCES

1. Identify macroeconomic problems.

2. Ability to understand and apply simple economic models.

3. Ability to relate the analysis of macroeconomic problems with the goals and instruments of economic policy.

4. Knowledge of the main macroeconomic variables and of the data sources where those variables can be found.

3. Contents

Topic 1. Introduction to Macroeconomics. Economic aggregates.

1.1 A look at the world economy Ben Ch. 1

1.2 Main economic aggregates: definitions and concepts Ben Ch. 2 and pp 290-295

Topic 2. The goods market Ben Ch. 3

Topic 3. Financial markets Ben Ch. 4

Topic 4. The IS-LM model Ben Ch. 5

Topic 5. Expectations

5.1 Consumption and investment Ben Ch. 16

5.2 Production and economic policy Ben Ch. 17

Topic 6. The labor market Ben Ch. 7

Topic 7. The aggregate supply and demand model Ben Ch. 8

Topic 8. The natural rate of unemployment and
the Phillips curve Ben Ch. 9

Topic 9. The open economy Ben Ch. 6

Topic 10. Growth

10.1 Facts and measurement of growth Ben Ch. 11

10.2 Saving, capital accumulation and output Ben Ch. 12

4. Assessment

Course evaluation will be based on the following criteria:

Grade from the final exam - 55 %

The final exam will take place at the end of the quarter and will last for two hours. The exam will cover all material discussed and lectured in class, the recommended readings for each Topic, the discussion and material from the seminars, and the problem sets that students have worked out during the quarter.

To pass the course the grade in the final exam has to be at least 35 points over a total possible of 100. If the grade in the final exam is below 35 points, the grade of the final exam will also be the grade of the course, and the results of the continuous evaluation will not be taken into account.

Grade from the continuous evaluation - 45 %

This part of the grade will be based on the evaluation of all activities that will take place during the quarter: problem sets, participation in seminars and partial exams of continuous evaluation.

The activities that contribute to the grade are:

1. Written solutions for all problem sets, attendance and participation in the seminars where problems sets will be solved (the first six seminars): 15%.
Problem sets can be worked out in group and in that case it is strongly advised to hand in only one copy of the problem sets for up to three students. In the case students work in group to solve the problem sets they will hand in one copy of the problem set solution with the names of the three students, obtaining the three the same grade in that part of the evaluation.

2. Seminar 7 - Content and presentation: 10%

3. Two partial exams (see time schedule): 20%

You can find the seminar group you belong to in Campus Global.

September evaluation will be based on the following criteria:

1. Final exam: 75%.
To pass the September evaluation, the grade in the final exam has to be at least 35 points over a total possible of 100. If the grade in the final exam is below 35 points, the grade of the final exam will also be the grade of the September evaluation, and the results of the continuous evaluation will not be taken into account.

2. Continuous evaluation: 25%.
Only items 1 and 2 of the continuous evaluation will be taken into account. The grades of the partial exams during the academic year will not be taken into account in the September evaluation.

5. Bibliography and teaching resources

In parenthesis and bold the abbreviation that we will use in the course outline to specify the references that correspond to each Topic.

5.1. Basic bibliography

Blanchard, O., Amighini, A. and Giavazzi, F., Macroeconomics. A European Perspective, Pearson Education Limited, 2010.(Ben)

5.2. Complementary bibliography

Mankiw, N. G., Macroeconomics, 6th edition, Worth Publishers, 2007. (Men)

6. Methodology

COURSE ORGANIZATION

The course duration is 10 weeks. All students of a section meet weekly with the professor for two lectures of an hour and a half. Furthermore, for 7 weeks, starting on the third week of the course, there will be weekly seminar sessions with smaller groups of students (sub-sections). Seminar sessions will be used to discuss in more depth the topics studied, to learn to relate the acquired knowledge to everyday economic issues and to solve the problem sets that students have previously handed in. Problem sets will be handed in weekly and solved in class with the active participation of students.

Solutions will be available in Campus Global after they have been solved and discussed in the seminar.

REQUIRED BACKGROUND

Basic knowledge of the decision processes of households and firms, and their interactions in markets, is required for the course. This knowledge has been acquired during the first quarter in the course Introduction to Microeconomics.

7. Planning of activities

TIME SCHEDULE

WEEK	THEORY LECTURES	SEMINARS	PROBLEM SETS Publication	PARTIAL EXAMS
Week 1 - lecture 1 10-14 January	Course organization Topic 1.1
Week 1 - lecture 2 10-14 January	Topic 1.2
Week 2 - lecture 3 17-21 January	Topic 2.1		Problem set 1
Week 2 - lecture 4 17-21 January	Topic 2.2 and 3.1
Week 3 - lecture 5 24-28 January	Topic 3.2	SEMINAR 1 Hand in and solve problem set 1	Problem set 2
Week 3 - lecture 6 24-28 January	Topic 4.1
Week 4 - lecture 7 31 January -4 February	Topic 4.2	SEMINAR 2 Hand in and solve problem set 2	Problem set 3
Week 4 - lecture 8 31 Gener-4 February	Topic 5.1
Week 5 - lecture 9 7-11 February	Topic 5.1 and 5.2	SEMINAR 3 Hand in and solve problem set 3	Problem set 4	FIRST PARTIAL EXAM Topics 1 to 4
Week 5 - lecture 10 7-11 February	Topic 5.2

WEEK	THEORY LECTURES	SEMINARS	PROBLEM SETS Publication	PARTIAL EXAMS
Week 6 - lecture 11 14-18 February	Topic 6.1	SEMINAR 4 Hand in and solve problem set 4	Problem set 5
Week 6 - lecture 12 14-18 February	Topic 6.2
Week 7 - lecture 13 21-25 February	Topic 7.1	SEMINAR 5 Hand in and solve problem set 5	Problem set 6
Week 7 - lecture 14 21-25 February	Topic 7.2
Week 8 - lecture 15 28 February -4 March	Topic 8.1	SEMINAR 6 Hand in and solve problem set 6
Week 8 - lecture 16 28 February -4 March	Topic 8.2
Week 9 - lecture 17 7 - 11 March	Topic 9.1	SEMINAR 7 Presentation by groups
Week 9 - lecture 18 7 - 11 March	Topic 9.2
Week 10 - lecture 19 14 - 18 March	Topic 10.1			SECOND PARTIAL EXAM Topics 5 to 9
Week 10 - lecture 20 14 - 18 March	Topic 10.2