Macroeconomics I

The general objective of the course is to understand the central ideas of macroeconomics as a branch that studies aggregate economic phenomena, and to learn about the theories for determining national income, employment and price levels, as well as their implications for macroeconomic policy. .

More specific goals include understanding:

- The importance of microeconomics as the basis of macroeconomics.
- How to measure aggregate economic activity at the national level.
- How to build models that study the relationships between different macroeconomic variables.
- The causes of economic fluctuations.
- The role of the government in stabilising these fluctuations.
- The relationship between the domestic economy and the rest of the world.
- The differences between the adjustment of the economy in the short and long run.

Basic skills:

- Critical reading of articles on current economic issues.
- Understanding the graphic, logical and numerical relationships between macroeconomic variables.
- Providing reasoned judgments on economic policy proposals based on macroeconomic models.
- Giving substantiated answers to questions about macroeconomic problems based on theoretical models.
- Investigating the implications of alternative causal chains for the results of different economic policies.
- Examining the existing empirical evidence to distinguish between alternative hypotheses.

1. THE MEASUREMENT OF MACROECONOMIC AGGREGATES

- GDP: nominal and real.
- The components of aggregate demand.
- The balance of payments.
- The measurement of employment.
- The rate of inflation.
- Savings, wealth and capital.
- Booms and recessions.


2. THE MULTIPLIER

- A simple model of income and output.
- The multiplier.
- The balance of payments constraint.
- Exchange rates.
- Fiscal policy.


3. CONSUMPTION AND SAVINGS

- The intertemporal consumption choice.
- The life cycle hypothesis.
- The permanent income hypothesis.
- The random walk hypothesis.


4. INVESTMENT

- The neoclassical model of investment.
- Tobin's q.


5. INTEREST RATES

- The market for money and the equilibrium interest rate.
- The liquidity trap.
- Monetary policy.


6. THE IS-LM MODEL

- The IS curve and the LM curve.
- Fiscal policy and monetary policy.
- Interest rate parity conditions.
- Monetary regimes.


7. THE LABOUR MARKET

- Search models.
- Frictional unemployment, cyclical unemployment and structural unemployment.


8. WAGES AND INFLATION
- The Phillips curve and the natural rate of unemployment.
- The IS-LM model with a Phillips curve.
- Demand policies and inflation.
- The impact of supply shocks.

Main textbook:

O. Blanchard: Macroeconomía (7ª ed.) Pearson Educación. 2015


Complementary textbooks:

- O. Bajo Rubio y C. Díaz Roldán: Teoría y Política Macroeconómica. Antoni Bosch. 2011.
- R. Dornbusch, S. Fischer y R. Startz: Macroeconomía (12ª ed.) McGraw-Hill. 2015.
- C.I. Jones: Macroeconomía. Antoni Bosch. 2009.
- N.G. Mankiw: Macroeconomía (8ª ed.) Antoni Bosch. 2014
- S.D. Williamson: Macroeconomía (4ª ed.) Pearson Educación. 2012

Competences of the degree to which the subject contributes:
- Possessing the basic analytical knowledge to study economics and acquiring the skills
of learning necessary to continue studying.
- Knowing the macroeconomic models for income determination both in a closed and in an open economy, as well as the features that characterise economic fluctuations.
- Knowing how to communicate information, ideas, problems and proposals for solutions to economic issues both to a specialised and
a non-specialised public, making use of both verbal and written language, as well as the visualisation techniques for relationships and data used in economics.
- Providing rationality to the analysis and description of any aspect of economic reality.
- Capacity for analysis and synthesis.
- Intellectual stimulation.

Specific competences of the subject:
- Knowledge of the basic concepts and indicators used in the analysis of short-run macroeconomics.
- Knowledge of the main factors for the short-run and medium-run determination of aggregate income and its components.
- Command of the basic models used to understand economic cycles.
- Knowledge of the basic concepts of macroeconomic policy and its impact on employment and inflation.
- Ability to apply theoretical models to the interpretation of macroeconomic data.

The work in the classroom combines theoretical expositions with interactive classes for the resolution of exercises, the analysis of cases and the analysis and discussion of problems.

The student's individual work should be directed to prepare the work in the classroom and consolidate and expand their knowledge. Through the resolution of exercises, the elaboration and discussion of cases and the discussion and analysis of problems, the student should reaffirm her knowledge and develop her analytical and oral expression skills.

The detailed teaching guide for the subject (describing in detail the assessment system, the teaching guides for each topic, the exercise bulletins, support material, complementary activities...) will be provided through the virtual classroom for the subject.

The assessment of the subject will take into account all the activities that must be carried out throughout the term, taking into account the different aspects of the acquisition of skills to which it contributes, as well as other aspects such as clarity and capacity of exposition, mastery of the subject's terminology or active participation in the classes.

The final marks will consist of 30% continuous assessment and 70% a final exam.

Continuous assessment tests cannot be delayed, since their objective is to know the evolution of the student's learning during the course.

Continuous assessment marks will be valid only for the present academic year and will not be maintained for subsequent editions of the course.

If the student does not carry out any academic activities subject to assessment, her mark will be "did not attend".

Students exempted from attendance according to General Secretary Instruction No. 1/2017, will be assessed solely through an specific final exam.

In case of fraudulent completion of exercises or tests, the provisions of the "Reglamento de avaliación do rendimiento académico dos alumnos e de revisión de cualificacións" shall apply.

CLASSROOM WORK:

Expository teaching: 31 hours
Interactive teaching: 17 hours
Tutorials in small groups: 3 hours
Final exam: 2 hours

Total hours of face-to-face classroom work: 53 hours


STUDENT'S PERSONAL WORK

Individual or group self-study: 20 hours
Writing of exercises, conclusions or other works: 30 hours
Exam preparation: 35 hours
Recommended reading and library activities: 10 hours

Total hours of student personal work: 95 hours

Regular attendance, active participation and extensive review of the bibliography are the fundamental elements for making the most of this subject.