Are you interested in a serious and solid background in economics?
This course offers you a thorough view of everything economists know about markets: their strengths, their failures, and how this view can help you understand the most relevant economic problems. We follow a rigorous approach that combines visual arguments with realistic examples to help you connect the main economic concepts with your own experiences.
The only required knowledge is certain familiarity with graph reading and basic high school mathematics.
By the end of this course, you will have explored the key questions in macroeconomics:
- Why some societies manage to coordinate and prosper in the long run and others don’t. Are developing countries doomed? What is postponing their prosperity?
- Why even the most successful economies experience occasional crises that compromise the quality of life?
- Why are there spikes in the unemployment or inflation that cause pain in our societies? What can we do about it?
Week 1: Introduction and Gross Domestic Product
Macroeconomic aggregates and Gross Domestic Product. The value added and the return of productive factors. The components of GDP. Real and nominal GDP and the GDP deflator. The determinants of productivity in the long run.
Week 2: Savings and Investment. Labor Market. Consumer Price Index
Savings and investment in a closed economy. The market for loanable funds. Main statistics of the labor market. Types of unemployment: the natural rate and the cyclical unemployment. The consumer price index and the measurement of inflation.
Week 3: Money, monetary system and inflation
Definitions of money. The fractional-reserve banking system. The central banks. The tools for monetary control. Money demand, money supply, and price level determination. The quantity theory of money and the causes of inflation over the long run.
Week 4: Open economies and exchange rates
Open economies and trade balances. Capital flows. The relationship between savings, investment, and capital flows in open economies. Nominal and real exchange rate. The Purchasing-power Parity theory for determination of nominal exchange rates. The relationship between inflation and depreciation.
Week 5: Economic fluctuations
Empirical regularities of economic fluctuations. The aggregate demand curve. The long-run aggregate supply curve. The short-run aggregate supply curve. The long-run equilibrium and the short run economic fluctuations.
Week 6: Fiscal and Monetary Policies
The money demand and the theory of liquidity preference. The impact of monetary policies on the aggregate demand. Fiscal policies and the multiplier effect. Fiscal policies and the crowding-out effect. The argument for and against the use of fiscal and monetary policy to stabilize the economy.
Ángel Hernando-Veciana and Esteban Nicolini