Department of Economics

Course: Macroeconomic Theory II

Code: ECO212

Semester: C

Instructors: E.Papapetrou, N.Kosteletou

Aims and Objectives

Having covered various aspects of the real economy and the monetary sector separately in Macroeconomic Theory I, this course incorporates these elements into a unified analytical framework. The course starts with the measurement of the business cycle and then builds two analytical frameworks for the analysis of the cycles. Namely, we focus on the IS-LM and AD-AS models to analyse macroeconomic equilibrium, i.e., the simultaneous determination of output, employment, interest rates and prices. We extent the analysis to cover the dynamic AD -AS model and trace out the effects over time of various shocks and policy changes on output, inflation and other variables. Then we consider how one can use the tools of macroeconomics to analyse historical episodes and contemporary economic policy dilemmas, including inflation, unemployment, business cycles etc. We extend the analysis to the open economy and examine the role of monetary and fiscal policy in macroeconomic stabilization. Finally, topics covered include Consumption, Investment, Budget Deficits and Debt, Financial Markets and Financial Crises.

Textbook:

N.G. Mankiw ,L. Ball, (2013) « Macroeconomics and the financial system» , Gutenberg