Macro-economics: Course Syllabus

Course Overview

Macroeconomics is the branch of economics that studies the performance, structure, and behavior of an entire economy. This course provides a comprehensive framework for understanding large-scale economic phenomena, focusing on key indicators such as national income, inflation, unemployment, economic growth, and international trade. It examines the theories, models, and policies governments and central banks use to manage economic stability and promote prosperity in an interconnected global context.

Course Objectives

By the end of this course, students should be able to:

1. Understand core macroeconomic concepts, theories, and models.

2. Analyze an economy’s performance using key macroeconomic indicators.

3. Apply macroeconomic models to interpret real-world economic issues and events.

4. Evaluate the effectiveness of fiscal and monetary policy decisions.

5. Explain the principles of international trade and finance and their impact on domestic economies.

6. Assess contemporary global economic challenges and policy debates.

Course Modules

MODULE 1: INTRODUCTION TO MACROECONOMICS

1.1 Definition of Macroeconomics

•  The study of the economy as a whole through aggregate variables.
•   Key Features: National/Global focus, Aggregate analysis, Short-run vs. Long-run perspectives.

1.2 Scope of Macroeconomics

•   National Income and Output, Employment and Unemployment, Inflationand Price Stability, Economic Growth and Development, International Trade and Finance.

1.3 Key Macroeconomic Concepts

•   Gross Domestic Product (GDP): Total value of final goods and services produced.
•   Inflation: A sustained increase in the general price level.
•   Unemployment: The situation where active job-seekers cannot find work.

1.4 Macroeconomic Goals

•   Economic Growth, Price Stability, Full Employment, and Equity.

MODULE 2: NATIONAL INCOME ACCOUNTING

2.1 Meaning of National Income

•   · The measurement of a nation’s total economic activity over a period.

2.2 Measurement of GDP

•   Expenditure Approach: GDP = C + I + G + (X – M)
•   Income Approach: Sum of all incomes (wages, rent, interest, profits).
•   Output (Value-Added) Approach: Sum of value added at each production stage.

2.3 GDP vs. GNP vs. NDP

•   GDP: Output within borders. GNP: GDP + net income from abroad. NDP: GDP –depreciation.

2.4 Limitations of GDP

•   Excludes the informal sector, ignores inequality and environmental costs, and is nota measure of welfare.

MODULE 3: AGGREGATE DEMAND AND AGGREGATE SUPPLY

3.1 Aggregate Demand (AD)

•   Total planned spending in an economy(C + I + G + NX).

3.2 Determinants of Aggregate Demand

•   Consumer confidence, interestrates, fiscal policy, exchange rates, foreign income.

3.3 Aggregate Supply (AS)

•   Total goods and services producers are willing to supply.
•   Short-run AS (SRAS): Positively sloped. Long-run AS (LRAS): Vertical at potential output.

3.4 AD-AS Equilibrium

•   Determines equilibrium price level and real output. Shifts explain business cycles,inflation, and recessions.

MODULE 4: FISCAL POLICY

4.1 Meaning of Fiscal Policy

•   Government use oftaxation and spending to influence the economy.

4.2 Tools of Fiscal Policy

•  Expansionary: Increases pending or cut taxes (for recession).
•   Contractionary: Decrease spending or raise taxes (for inflation).

4.3 Fiscal Policy and Stabilization

•   Goals: Manage aggregate demand, reduce unemployment, control inflation, promote growth.

4.4 Budget Deficits and Surpluses

•   Deficit: G > T. Surplus: T > G. Implications for public debt and inter generational equity.

MODULE 5: MONETARY POLICY

5.1 Meaning of Monetary Policy

•   Central bank management of money supply and interest rates to achieve macroeconomicgoals.

5.2 Tools of Monetary Policy

•   Open Market Operations, Policy Interest Rates, Reserve Requirements.

5.3 Role of Central Banks

•   Price stability, financial systemregulation, lender of last resort.

5.4 Monetary Policy and Economic Stability

•   Transmission mechanism, limitations (e.g., liquidity traps).

MODULE 6: ECONOMIC GROWTH AND DEVELOPMENT

6.1 Economic Growth

•   Increase in real GDP or real GDP per capitaover time.

6.2 Determinants of Economic Growth

•   Physical/Human Capital, Technology, Natural Resources, Institutions.

6.3 Economic Development

•   Broader improvement in living standards, health, freedom, and equality.

6.4 Challenges to Development

•   Poverty traps, inequality, corruption, weak infrastructure, environmental degradation.

MODULE 7: INFLATION AND UNEMPLOYMENT

7.1 Inflation: Causes and Types

•   Demand-Pull, Cost-Push, Built-In Inflation.

7.2 Consequences of Inflation

•   Redistributive effects, menu costs,shoe-leather costs, uncertainty.

7.3 Unemployment: Measurement and Types

•   Frictional, Structural, Cyclical,Seasonal.

7.4 The Phillips Curve (Introductory Concept)

•   Short-run trade-off between inflationand unemployment.

MODULE 8: INTERNATIONAL TRADE AND FINANCE

8.1 Foundations of International Trade

•   Comparative advantage, gains from trade.

8.2 Trade Policies

•   Tariffs, Quotas, Subsidies. Pros and cons of protectionism.

8.3 Exchange Rates

•   Systems (fixed vs. floating), determinants, impact on trade and investment.

8.4 Balance of Payments (BoP)

•   Structure: Current Account, Capital Account, Financial Account. BoP imbalances.

Recommended Texts & Resources

• Core Textbook: Mankiw, N. G. Principles of Macroeconomics (Latest Ed.)
• Supplementary Reading: Blanchard, O. Macroeconomics (Latest Ed.)
• Online Resources: Khan Academy Macroeconomics, IMF eLibrary, World Bank Open Data.
• News & Analysis: The Economist, Financial Times, Bloomberg Economics.

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Syllabus/E-cyclopedia Resources by Kateule Sydney is licensed under CC BY-SA 4.0