Module Catalogue 2024/25

Pre Requisite Comment

Admission to the MSc in International Economics and Finance

Co Requisite Comment

No

Aims

The module starts with an introduction to growth theory to study the economy’s performance in the long run. It then moves to study the IS-PC-MR to develop students’ understanding of how the economy works in the short run and analyse monetary policy, to give students the opportunity to apply these models to the analysis of various economic shocks and evaluate the effect of policies on the economy. Finally, the module covers unemployment theory, including efficiency-wage theories, contracting, insider/outsider theory, and search and matching models.

Outline Of Syllabus

Lectures 1-2:

Growth Theory: The Solow Model

Lectures 3-5

The IS-PC-MR model in a closed economy
Economic Shocks and policy response
Extending the model to an open economy

Lecture 6-7
Unemployment theory: 1)Efficiency-wage theories, 2)Contracting, insider/outsider theory
3) Search and matching models

Intended Knowledge Outcomes

1. Understanding of how economies grow. and the long run
2. Explain the 3 equation model in closed and open economies using equations and diagrams
3. Analyse the reaction of the economy to macroeconomic shocks using the 3 equation model
4. Adapt the closed economy model to incorporate elements of the open economy
5. Understand the importance of unemployment and theories that explain it.

Intended Skill Outcomes

1.       Students should be able to understand the differences in terms of growth and level of GDP across economics, and understand what factors can affect short run an long run growth.
2.       Students should be able to solve complex problems by framing the problem and using the model developed to predict the most likely outcome of macroeconomic shocks and recommend economic
3.       Students should understand the limitations of perfectly competitive labour markets in explaining unemployment, and different frameworks that can be used to explain it (and their relevance in different scenarios)

Teaching Rationale And Relationship

Lectures provide the theoretical framework for the study of Macroeconomics.
Seminars provide an opportunity to enhance and test the understanding gained in lectures and private study.

Assessment Rationale And Relationship

The written exam consists of a set of scenarios that test students’ ability to select the appropriate framework for analysis, use it to predict the most likely outcomes for the macroeconomy and present the argument in a logical and coherent way, paying attention to the limitations of the models used.

General Notes

N/A