Download Andrei Stoianov

Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Set of Syllabi of Courses in Macroeconomics
Andrei Stoianov
Advanced International Economics Syllabus
This course will be taught on the third year of undergraduate studies in Novosibirsk
State University. Students have already studied the first part of International
Economics and International Trade Theory on the second year, as well as
Macroeconomics. Its purpose is to deepen the knowledge of the previous course and
to provide students with the most recent developments in the theory of International
Trade and Economics. The course is divided into two parts. The first one deals with
the modern tendencies of International Economics and examines alternative theories
and models of how international trade influences the workings of national economies.
It is full of sophisticated math and mathematical models, following the most recent
articles in international economic journals. The second part contains absolutely no
math or calculus and concerns applied aspects of international theories, based on the
empirical evidences of EU integration process.
The course consists of 27 lectures without seminars. The grade is 80% determined on
the final exam and 20% on two assignments. The first part is based on the number of
fundamental articles of international economics and the copies of the original papers
will be distributed among students as the studying material. In the brackets the
number of lectures to be devoted to the certain topic is written.
Course Outline:
Part I: International Trade
TOPIC 1. TRADE AND TECHNOLOGY – THE RICARDIAN MODEL OF
TRADE (4)
 Dornbusch, R., S. Fischer and P.A. Samuelson: Comparative Advantage,
Trade and Payments in a Ricardian Model with a Continuum of Goods,
American Economic Review, 1977.
 Young, A.: Learning-by-doing and the Dynamic Effects of International
Trade, Quarterly Journal of Economics, 1991.
 Krugman, P.R.: The Narrow Moving Band, the Dutch Disease, and the
Competitive Consequences of Mrs. Thatcher: Notes on Trade in the Presence
of Scale Dynamic Economies, Journal of Development Economies, 1987.
TOPIC 2. TRADE AND FACTOR ENDOWMENTS: THE HECKSCHER-OHLIN
MODEL (6)
 Helpman, E. and P.R. Krugman: Market Structure and Foreign Trade, chapter 1.
 Stiglitz, J.: Factor-Price Equalization in a Dynamic Economy, Journal of
Political Economy, 1970.
 Davis, D.R.: Intraindustry Trade: A Heckscher-Ohlin-Ricardo Approach,
Journal of International Economics, 1995.
 Leamer, E.E. and J. Levinsohn: International Trade Theory: The Evidence,
Handbook of International Economics III.
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
TOPIC 3. TRADE, PRODUCTION PATTERNS AND INCREASING RETURNS (3)
 Helpman, E. and P.R. Krugman: Market Structure and Foreign Trade, chapter 3.
 Krugman, P.R.: Rethinking International Trade, chapters 1-3.
 Krugman, P.R.: Increasing Returns and Economic Geography, Journal of
Political Economy, 1991.
TOPIC 4. TRADE POLICY (3)
 Helpman, E. and P.R. Krugman: Trade Policy and Market Structure, chapter 2.
 Krugman, P.R.: Rethinking International Trade, chapter 14.
Part 2 . Economics of European Integration
Main textbooks for this part:
D. Dyker, “The European Economy”, 2nd ed., Longman, 1999.
El-Agraa “The European Union”, 6th ed., Pearson Education, 2000.
J. Pelkmans “European Integration, methods and economic analysis”, 2nd ed.,
Pearson Education, 2001.
TOPIC 1. INTRODUCTION (1)
Economic integration organisations in the world economy, global experience, GATT
and WTO rules. History and institutions of the EU (development of the EC/EU, the
European institutions). Reform of the EU institutions
TOPIC 2. THE LEGAL ASPECT IN THE EU INTEGRATION (2)
An economic conditions for integration. Single Market Act. The treaties subsidiarity
and economic functions of the EU (economics of subsidiarity, subsidiarity and EU
regulating strategies).
TOPIC 3. MAJOR EU POLICIES (4)
Common Agricultural Policy. Common Trade Policy. Competition policy and Social
policy. Industrial policy and Energy policy.
TOPIC 4. EU ENLARGEMENT (2)
Europe trade and economic agreements. Problems of negotiation. Free movements of
goods and services, capital, FDI, labour.
TOPIC 5. APPLICANT COUNTRIES AND THE FUTURE OF THE EU (2)
Co-operation and integration among the CEECs: CEFTA and the EU. Development
and the future of the EU, global role of the EU.
2
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Almagul Zhumabekova
Kazakh Economic University
Department “Macro-Microeconomics”
Syllabus for the course "Macroeconomics"
The course is designed for 72 hours: 36 hours of lectures, 18 hours of practical
sessions and 18 hours of laboratory sessions.
Theme 1. Introduction in the Macroeconomics (2 h. lect). The subject of
Macroeconomics. The purpose and tasks of macroeconomic policy. The
Macroeconomic model. Stocks and flows. Model of circular flows. "Outflow" and
"injection”. General conditions of macroeconomic balance.
Theme 2. Measurement of results of economic activity. GDP. Indices of the prices (2
h. lect + 2 h. pract +2 h lab). GDP and GIP, ways of measurement. Other indicators of
income and production. Basic macroeconomic identity. Nominal and real indicators.
Indices of prices. Estimation problems of nation’s well-being.
Theme 3. Macroeconomic instability: business cycles, unemployment, inflation. (4 h.
+ 2 h. + 2 h.). Business cycle and dynamics of basic macroeconomic indicators.
Potential GDP. The forms of unemployment. Rate of inflation. Interrelation of
inflation and unemployment.
Theme 4. General macroeconomic equilibrium: model of aggregate demand and
aggregate supply (2h. + 2h. + 2h.). Aggregate demand and its determinants.
Aggregate supply: Neo-Classical and Keynes theory. Маcroeconomic equilibrium in
the model of aggregate demand and aggregate supply. Shocks of demand and supply.
Stabilising policy.
Theme 5. Macroeconomic equilibrium in commodity market. Keynes’s model of
incomes and expenditures. (2h. +2h. +2h.) Equilibrium of aggregate demand and
aggregate supply and complete employment of resources. Components of aggregate
demand and level of the planned expenditures. Consumption and savings.
Investments. Actual and planned expenditures. Keynes’s cross. Mechanism of
achievement of equilibrium volume of production. Fluctuations of an equilibrium
level of economic activity around its potential level. The autonomous spending
multiplier. Recession and inflationary breaks. Paradox of economising. Interrelation
of AD-AS model and Keynesian cross.
Theme 6. Fiscal policy (2h. +2h. +2). Short-term versus long-term objectives of fiscal
policy and its tools; government expenditures multiplier. The animator of the taxes.
The multiplier of the balanced budget. Discretionary and non-discretionary fiscal
policy. Budget deficits and surpluses. The built-in stabilisers of economy. Cyclic and
structural government budget deficits. Influence of budget surplus on economy.
Inflationary and non-inflationary ways of financing budget deficit. Seignioriage.
Crowding-out effect. Problems of tax receipts increase in the state budget.
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Theme 7. The money market: demand for money, supply of money, equilibrium in the
money market. (2h. +2h. +2h.) Basic money units. Neo-Classical and Keynes’s
theory of demand for money. Model of money supply. The money multiplier.
Equilibrium on the money market.
Theme 8. Monetary policy. (2h. +2h. +2h.). The purposes and tools of monetary
policy. The transfer mechanism of monetary policy, its connection with fiscal and
exchange rate policies.
Theme 9. Macroeconomic equilibrium in the commodity and money markets (4h.
+2h. +2h.). IS-LM model. Relative efficiency of fiscal and monetary policy.
Theme 10. Economic growth (4 h. lect). Keynesian model of economic growth. NeoClassical model of economic growth by Р.Solow.
Theme 11. Choice of macroeconomic policy models. (2 h. lect + 2 h. pract.). Fiscal
and monetary policy. Stabilising policy. Rules versus discretion in macroeconomic
policy.
Theme 12. Balance of Payments. (4 h. lect. + 2 h. lab). Macroeconomic meaning,
basic sections and structure of Balance of Payments. Influence of macroeconomic
policy on Balance of Payments. Deficit of Balance of Payments.
Theme 13. Budget deficit and government debt management (2 h. lect.). Budget
deficit and government bonds. Basic definitions, indicators, and problems of
quantitative estimation. Basic reasons for permanent budget deficits and increases of
government debt. Primary deficit of government budget. Government bonds, taxes,
investments and economic growth. Strategy of government debt management.
Theme 14. Internal and external balance: problems of the economic state. (2 h. lect.)
Influence of monetary and fiscal policy on balance of payments. Economic policy
under floating exchange rate. The factors complicating realisation of effective
economic policy.
The laboratory works will be carried out in a computer class with use of the
programme package "Мacrosolve" (World Bank) for strengthening knowledge of
students in Macroeconomics, and also with the purpose of development skills of
independent economic thinking and skills of independent analysis of real economic
data.
On the first session the teacher introduces students with the interface of the
programme package. On all subsequent sessions and after classes students works with
the programme. As the experience showed, a deeper understanding of lecture material
in the presence of practical situations and examples was achieved, sessions were
fruitful and interesting for the students.
4
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Andrey Velichko
Economic theory, Macroeconomics I
Speciality 06.18.00 Mathematical methods and operations research in economics
Department of mathematical methods in economics
Chair of applied mathematics and information technologies
Year 1, semester 2
Lectures – 32 hours.
Seminars – 32 hours.
EXPLANATORY NOTE
The purpose of the given course in economic theory encompassing macroeconomics
as a part of economic theory consists of introducing basic concepts and methods of
macroeconomic analysis to students, developing practical skills of activity connected
with the analysis of macroeconomic variables and operating with real economic data.
The given course is a basic one for students familiar with a course of microeconomics
I.
Course Outline
1. Introduction to macroeconomics (2)
The subject of macroeconomics as a part of economic theory, basic concepts of
macroeconomic analysis such as aggregation, the cause and consequence, difference
in micro and macroeconomic approaches. The main problems of macroeconomics.
2. Macroeconomics models (2)
The classical and system model of macroeconomic processes reflecting goods-money
flows between macroeconomic agents such as households, firms, banking system,
Central bank, government, importers and exporters on the markets of consumer goods
and services, credit, investments, currency and world market are studied.
3. System of national accounting and gross domestic product, methods of GDP
measurement (4)
Definition of GDP of national economy and three main methods of GDP calculation.
4. Gross national product, national income flows (2)
Definition of GNP and structure of national income flows, including depreciation,
indirect taxes on business, transfer payments of the state and taxes are studied.
5. Nominal and real GDP, deflator of GDP and price indexes, GDP and public
welfare (2)
5
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Problems of real GDP calculation taking into account change in goods and services
prices, methods of price indexes calculation, deflator and consumer price index.
Problem of adequate estimation of public welfare by index of real GDP and problem
of GDP statistics.
6. Savings and investment in closed economy (2)
Influence of savings ratios of individuals and government in economy, investments
and financial flows of macroeconomic agents.
7. Balance of payments, international trade and exchange rates, interrelation of
national accounts in an open economy (4)
Balance of payments concept, current account and capital account, influence of
international goods-money flows on national economy. Equilibrium on domestic
exchange market.
8. Basic model of aggregate demand, multipliers, goods market and IS curve (4)
Keynesian model of aggregate demand, Investment-Savings curve as a reflection of
equilibrium in goods market. Miltiplier effect of government expenditures on GDP,
balance of public finance, taxes, investments and autonomous consumption are
discussed.
9. Money and its functions, money supply and money demand, LM curve,
banking system and loan market (2)
Definition of money, money aggregates, functions of money in economy, process of
"creation" and "destruction" of money by banking system; Liquidity-Money curve as
a reflection of equilibrium on money market and capital market, equilibrium on a loan
market.
10. Fiscal, credit and budget policy in a model of aggregate demand (2)
General equilibrium in IS-LM model, aggregate demand function, influence of fiscal,
and monetary policy on aggregate demand.
11. Labour market, model of aggregate supply, general equilibrium in the model
of aggregate demand and suply (2)
Equilibrium on labour market in Keynesian model, aggregate supply curve and
general equilibrium in an interaction of aggregate demand and supply, problems of
stable state policy, regulations of aggregate demand and supply.
12. Business cycles in the short-term, Phillips' curve and Okun's law (2)
Okun's law as a connection between changes in GDP and unemployment; Phillips'
curve as a short-term interrelation between unemployment and inflation. Problem of
short-run trade-off between inflation and unemployment in economy.
6
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
13. Economic growth (2)
Concept of economic growth, the evolution of economic growth models from Adam
Smith till nowadays, modern view on economic growth problem and primary goals
for governments in developed and developing countries.
SEMINARS (32)
Introduction to macroeconomics and macroeconomic models (2)
System of national accounts and gross domestic product (GDP), methods of GDP
measurement (4)
Gross national product and national income flows (2)
Nominal and real GDP, deflator of GDP and price indexes, GDP and public welfare
(4)
Savings and investments in a closed economy (2)
Balance of payments, international trade and exchange rates, interrelation of national
accounts in an open economy (2)
Basic model of aggregate demand, multipliers, goods markets and IS curve (2)
Money and its functions, money supply and money demand, LM curve, banking
system and loan market (4)
Fiscal, and monetary policy in the model of aggregate demand (2)
Labour market, model of aggregate supply, general equilibrium in the model of
aggregate demand and supply (4)
Business cycles in the short-run, Phillips' curve and Okun's law (2)
Economic growth (2)
RECOMMENDED LITERATURE
Main
1. Tarasevich L.S. and others Macroeconomics.–S.-P., 1999
2. Galperin V.M. Macroeconomics.–S.-P., 1999
3. Selischev A.S. Macroeconomics.–S.-P., Piter, 2000
Optional
1. Blaug M. Economics thought in retrospective.–M: Delo, 1992
2. Sachs J., Larrain F. Macroeconomics in the global economy.–M.: Delo, 1996
3. Burda M., Wyplosz Ch. Macroeconomics. A european text.–S.-P., Sudistroenie,
1998
4. Mankiw G. Economics principles.–S.-P.: Piter, 2000
5. Heyne P. Economical way of thinking.–M.: Delo, 1992
6. Distance course of world bank in macroeconomics http://edinp.worldbank.org.ru/
7. Distance
course
of
world
bank
in
macroeconomics
http://www.worldbank.org.ru/wbimo/course.htm
Macroeconomics - 2
Speciality 06.18.00 Mathematical methods and operation research in economics
7
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Department of mathematical methods in economics
Chair of applied mathematics and information technologies
Year 3, semester 1, 2
Lectures – 68 hours.
Seminars – 34 hours.
EXPLANATORY NOTE
The given course of macroeconomics is a course of advanced level, its purpose is a
detailed analysis of economic events from Keynesian point of view, construction of
different mathematical models of the main interrelations in the economy. The
comparative characteristic of Neo-classical, Keynesian and Post-Keynesian directions
in macroeconomics is given. The given course is intended for the students familiar
with a course of economic theory and microeconomics II.
Course Outline
1. Aggregate demand: consumption and investments (8)
Mathematical models of consumption and investment functions, factors influencing
consumption and investment.
2. Aggregate supply (4)
Comparative analysis of mathematical models of labour market in Neo-classical and
Keynesian theory, different cases of curves of aggregate supply.
3. Economic cycles (6)
Modern view on cyclical macroeconomic development, main characteristics and
causes of business cycles.
4. Economic growth (6)
Different approaches to concepts of economic growth and basic mathematical models
of economic growth are studied.
5. Mathematical models of inflation (4)
Problems of construction of adequate mathematical models of inflationary processes
in a short-term and mid-term.
6. Fiscal policy (4)
Comparative analysis of fiscal policy from Neo-classical and Keynesian point of
view.
7. Money supply and demand. Monetary policy (4)
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Mathematical model of money market, equilibrium on money market, banking system
and monetary policy.
8. General equilibrium in economy (4)
Mathematical models of general equilibrium in Neo-classical and Keynesian models.
9. Economic policy in main macroeconomic models (4)
Problems of economic policy, the problem of trust to policy-making institutions,
efficiency of government macroeconomic regulation tools.
10. Theory of international trade. Foreign trade policy (8)
Theory of international trade, distribution of foreign trade gains and distribution of
incomes, commercial policy, tariff and not tariff methods of regulation of
international trade.
11. Exchange market and exchange rates (4)
Models of exchange market and real exchange rate.
12. Macroeconomic equilibrium in an open economy (4)
Main links in an open economics and model of internal and external equilibrium.
13. Macroeconomic policy in an open economy (8)
IS-LM model for an open economy, internal and external balances under fixed and
floating exchange rates.
SEMINARS (34)
1. Aggregate demand: consumption and investments (4)
2. Aggregate supply (4)
3. Macroeconomic cycles (2)
4. Economic growth (4)
5. Model of inflation (2)
6. Fiscal policy (2)
7. Money supply and demand. Monetary policy (4)
8. General equilibrium in economy (2)
9. Economic policy in main macroeconomic models (2)
10. Theory of international trade. Foreign trade policy (2)
11. Exchange market and exchange rates (2)
12. Macroeconomic equilibrium in an open economy (2)
13. Macroeconomic policy in an open economy (2)
9
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
RECOMMENDED LITERATURE
Main
1. Sachs J., Larrain F. Macroeconomics in the global economy.–M.: Delo, 1996
2. Burda M., Wyplosz Ch. Macroeconomics. A european text.–S.-P., Sudistroenie,
1998
3. Tarasevich L.S. and others Macroeconomics.–S.-P., 1999
4. Selischev A.S. Macroeconomics.–S.-P., Piter, 2000
Optional
4. Mankiw G. Economics principles.–S.-P.: Piter, 2000
5. Distance course of world bank in macroeconomics http://edinp.worldbank.org.ru/
6. Distance
course
of
world
bank
in
macroeconomics
http://www.worldbank.org.ru/wbimo/course.htm
10
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Svetlana Golovina
Macroeconomics
Course Description:
Macroeconomics studies national and international economy, business environment
for every firm and investor. While this is by definition a huge subject, we focus on a
few major topics. First, we establish the structure and measurement of economic
performance. We then turn to analysis of the closed and open economy in the long
run, and what determines long-run growth. Here, we pay particular attention to
productivity and the recent debate on the "New Economy". Then, we consider
government economic policy. The two main branches of macroeconomic policy are
monetary policy, managed by the Federal Reserve, and fiscal policy, which is
government spending and taxation. Certainly, we wrap up by considering business
cycles (booms and recessions), their causes, and associated unemployment.
Intended learning outcomes:
At the end of the course students should be able to:
1. Understand and explain the basic principles determining the level of economic
activity.
2. Understand and explain the causes and processes of inflation and the relationship
between inflation and economic activity.
3. Extend their understanding of closed economy relationships to the analysis of basic
issues in an open economy, especially the determination of exchange rates.
4. Analyse the determinants of consumption and investment demand.
5. Understand the processes by which expectations are formed and altered, integrate
expectations into a variety of economic contexts, and appreciate their importance in
influencing economic behaviour.
Prerequisites
Outline content:
Basic aggregate supply and aggregate demand relationships. Money; IS/LM; closed
economy equilibrium. Inflation, inflation expectations and, inflation-unemployment
relationship. Open economy: competitiveness; exchange rates, capital flows; PPP;
interest parity; overshooting; natural resources. Consumption and investment: Main
theories of consumption and investment, and survey of relevant empirical researches.
Teaching and learning methods:
Lectures: develop all the main unit material.
Classes: cover exercise material designed to facilitate understanding of lecture topics.
Note that, because of anticipated large numbers of students, it may be impossible to
organise small group class sessions, and classwork may instead need to be organised
on a plenary basis.
Problem Sets: There will be five group of problem sets during the term. These are
intended to help students keep up-to-date on the material as the course proceeds.
11
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Hence, they will be turned in each week, but will not be graded. Each week, it will be
recorded that a group completed a problem set, and each completed problem set will
be worth 3 points toward the final grade. Together, successfully completing all five of
the problem sets will add 15 points toward the final grade. (Since they are primarily
for students’ understanding, students are welcome to consult with the teacher about
the problem sets during the weekly review sessions.)
Country Analysis: Each group will be asked to provide an analysis of the current
macroeconomic situation and performance in a country of their choice. This
assignment is intended to be an application of the tools learned in class, so analysis
(rather than just description) is emphasised and anticipated. The format and
requirements for this assignment will be posted on the course web site. The grade for
this group project will be 35% of the final grade.
Final Exam: An in-class final exam will be held during the last class of the term. This
exam will be worth 50% of the final grade.
Office hours will be available for students to consult lecturers on an individual basis.
Texts and readings:
1.1 Begg, Dornbusch and Fischer, Economics (7th edition) McGraw Hill, 2002
1.2 Campbell R. Mcconnel, Stanley L. Brue. Economics, Moscow, 1992
1.3 Mankiw, N.G. Principles of Economics, Dryden, 1998
COURSE OUTLINE
Lecture 1. Aggregate Economic Activity and Economic Policy
1.1 Economic instability in production, employment, and prices, and economic policy
1.2 Economic growth and economic policy
Lecture 2. Measuring National Income
1.1 Stocks and Flows. Circular Flow of Income
1.2 Measuring economic activity: expenditure, income, production
1.3 GNP Measuring. Determinants of Consumption, Investment, Government
Expenditures and Net Exports.
1.4 Samples, surveys, and data revisions
Lecture 3. Goods Market. Equilibrium and Disequilibrium
1.1 Determination of Equilibrium Output
1.2 Equivalence of Injections-Leakages and Keynesian cross approaches.
1.3 Multiplier. Balanced Budget Multiplier
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Lecture 4. Money Market
1.1 Nature and Functions of Money
1.2 Quantity theory of "money"
1.3 Demand for Money. Supply of Money
Lecture 5. Inflation and Consequences
1.1 Inflation and Value of Money.
1.2 Inflation in Macro Model. Keynesian and Neo-Classical Views
1.3 Inflation and its consequences
1.4 Policies to Combat Inflation
Lecture 6. Fluctuations in Aggregate Demand
1.1 "IS" and "LM" Curves
1.2 Shifting and Tilting the "IS" and "LM" Curves
1.3 Short-term and long-term, and real and nominal interest rates
1.4 Case study: the Great Depression
Lecture 7. Aggregate Supply
1.1 Slope of aggregate supply curve
1.2 Macroeconomic Policy; Limits of Stabilisation Policy
1.3 Automatic Stabilisers; Rules vs. Discretion
Lecture 8. Unemployment
1.1 "Frictional" and "wait" unemployment
1.2 Labour market patterns and the incidence of unemployment
1.3 Consequences of Unemployment
1.4 Policies to reduce unemployment
Lecture 9. International Macroeconomic Policy
1.1 Balance of Payments Accounts. Balance of Payments Deficits and Surpluses
1.2 Introduction to Foreign Exchange Market. Exchange rate and business cycle
1.3 Fixed and floating exchange rates. Monetary Theory of Exchange Rates. PPP.
1.4 Case study: the Russian collapse of 1992
Lecture 10. International Trade and Investment
1.1 International trade and productivity
1.2 International trade and trade balance
1.3 Trade balances, international investment, and exchange rate
1.4 Case study: the Russian exchange rate in the 1990s
Lecture 11. Targets and Instruments of Economic Policy
1.1 Targets of Economic Policy
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
1.2 Choice of Target in Transition Economies
1.3 Conduct of Policy in Transition Economies of Russia
Lecture 12. Long-Run Economic Growth
1.1 Capital accumulation and population growth
1.2 "Technological" progress
1.3 Productivity slowdown
1.4 Savings, social security, and growth
14
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Maria Dubovskaya
Macroeconomics
№
1
2
3
4
5
6
7
8
9
10
Theme
Basic macroeconomic variables (revision)
GNP, GDP, alternative measures of income, CPI and
GNP deflator (commons and differences), rate of
unemployment
National income: its production, distribution and
allocation
Revision of factors of production, factor prices,
production function
Distribution of national income to factors of production.
Neoclassical model of general equilibrium
Economic growth
Solow growth model, golden rule level of capital
accumulation, Solow residual
Unemployment
Natural
rate
of
unemployment,
frictional
unemployment, wage rigidity and wait unemployment,
causes of wage rigidity (minimum wage laws,
unionization, effective wages)
Inflation
Functions and types of money (revision), quantity
theory of money, seigniorage, the Fisher effect, social
costs of inflation
Money supply and money demand
Modelling of money supply, instruments of monetary
policy, portfolio theories of money demand, transaction
theories of money demand, Baumol-Tobin model
Open economy in the long run
National income accounting in small open economy,
model of small open economy, real and nominal
exchange rate, influence of policies on exchange rate,
large open economy
Introduction to economic fluctuations
The simple model of aggregate demand, short run and
long run supply curves, stabilization policy
Fluctuations in the short run. The IS-LM model
Keynesian cross, IS curve, loanable funds interpretation
of IS curve, the theory of liquidity preferences, LM
curve, linear IS-LM model.
Explaining fluctuation with the IS-LM model, IS-LM
model as a theory of aggregate demand
Aggregate supply
Sticky wage model, worker misperception model,
imperfect information model, sticky price model, the
Phillips curve, rational expectations, aggregate demand
externalities, natural rate hypothesis, hysteresis
Lectures Seminars
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
4
4
2
2
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
11
12
13
14
15
16
Open economy in the short run
The Mundell-Fleming model, small open economy
under floating and fixed exchange rate, large open
economy in the short run
The theory of real business cycle
Real business cycle model, technology shocks,
interpretation of unemployment, money neutrality
Consumption
Keynesian consumption function, I. Fisher model of
intertemporal choice, Modigliani life-cycle model,
Friedman permanent income hypothesis
Government debt
Traditional and Ricardian view of government debt,
Barro-Ricardo equation
Investment
Neoclassical model of fixed investment, residential
investment, inventory investment
Macroeconomic policy debate
Active and passive macroeconomic policy, inside and
outside lags, time inconsistency, Lucas critique,
macroeconomic policy by rule and be discretion
2
2
2
2
2
2
2
2
2
2
2
2
I would like to give some comments to this syllabus. In our university the course of
macroeconomics lasts for a year. The first term part of the course is intermediate and
the second one is advanced. So this syllabus is only for the first term.
16
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Zrinka Kvesic
Polytechnics of Pozega
Department of Business and Economics
Pozega, Croatia
Syllabus «Macroeconomics»
Lecturer: V.Cini, Prof. PhD
Teaching Assistant: Z. Kvesic, Bsc., Econ.
Description: The course of introductory macroeconomics is taught to first year
students at the Department of Business and Economics at Polytechnics of Pozega.
Course is taught in two semesters: 60 hours of lectures and 30 hours of seminar
classes per year. The goal is to enable students to comprehend the basic concepts of
national economy, to encourage them to look for the causes of the basic
macroeconomic problems (unemployment, inflation, budget deficit, etc.) and to be
able to predict the effects of monetary and fiscal policies on performance of the
national economy.
Pre-requisites: basic calculus, introductory economics, microeconomics.
Topics:
Introductory macroeconomics,
roots, sense and meaning of macroeconomic concepts
Economics as a science, historical development;
normative vs. positive economics;
macroeconomics vs. microeconomics
Resources and the concept of scarce resources, allocation,
Identification of basic macroeconomic problems (business cycles,
unemployment, inflation, deficit problems, growth)
The concept of national economy: economic cycle, concept of GDP
Goods market and GDP, classical model of closed economy
AS-AD model, equilibrium, macroeconomics and political options
Aggregate spending: individual consumption, investments,
governmental spending, equilibrium, AD schedule
Keynes model of closed economy: short term fiscal effects
Financial markets, money, financial institution
National economic policy: monetary and fiscal policy
IS-LM model
Labour market, unemployment, AS schedule
Expectations vs. inflation: inflation and unemployment
Model of small, open national economy: classical model,
Keynes model, fiscal policy effects in open economy
Balance of payments
Basic concepts of growth and growth theories
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Literature: (mandatory)
1. M.Babic “Makroekonomija”, 12. izdanje, Mate, Zagreb, 2001.
2. S.Sharma, A. Bogunovic: “Narodno gospodarstvo” AGM, Zagreb, 1998.
Literature: (optional)
1.
2.
O. Blanchard “Macroeconomics”, Prentice Hall, New Jersey, 2001.
D. Borozan “Makroekonomija” EFO, Osijek 2001.
Tutorials:
1.
2.
3.
D.W. Findlay : “Study guide and tutorial for Macroeconomics”, Prentice
Hall, New Jersey 2001.
D. Borozan: “Prirucnik iz makroekonomije” EFO, Osijek 2001.
seminar assignments, individual notes
Exam:
Written and oral exam are mandatory. Students attending seminar classes regularly
may take collocquial exam at the end of each semester.
18
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
Valery Chernooky
Belarussian State University
Department of Applied Mathematics and Computer Sciences
MODELS OF INTERNATIONAL TRADE AND FINANCE
Lecturer: Valery Chernooky
Course Information:
Year:
Semester:
4
2
Lectures:
Seminars:
18 (36 hours)
9 (18 hours)
Course Goals:
1. To familiarize students with theoretical models of international trade and
finance;
2. To develop students ability to use apparatus of mathematical modelling in
analysis of international trade and finance;
3. To enable students to read and critically evaluate published professional
literature in international economics.
Expected Outcomes:
At the completion of this course students will be able to:
1. Understand operation of international trade and finance;
2. Use in practice research methods of international economics;
3. Understand and critically evaluate in future professional activity practical
problems related to operation of international trade and international finance
markets.
Prerequisite Courses:
This course assumes a familiarity with:
1. Intermediate course in microeconomics;
2. Intermediate course in macroeconomics;
3. Introduction course in algebra and differential calculus.
Assessment:
Assessment is based on oral examination
Literature:
Main Literature:
19
Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
1. Krugman, P. and M. Obstfeld, International Economics: Theory and Policy. –
4-th ed. – Reading Mass., Addison-Wesley, 1997.
2. Kireev A., International Economics. – Moscow.
Optional Literature:
1. Dornbusch, R., S. Fisher and P. Samuelson (1977), Comparative Advantage,
Trade and Payments in a Ricardian Model with a Continuum of Goods. The
American Economic Review, 67(5), pp. 823-839.
2. Jones, R.W. (1965), Factor Proportions and the Heckscher-Ohlin Model.
Review of Economic Studies, 24(1), pp. 1-10.
3. Stolper W. and P. Samuelson (1941), Protection and Real Wages. Review of
Economic Studies, 9, pp. 58-73.
4. Rybczynski T. (1955), Factor Endowment and Relative Commodity Prices.
Economica, 22(84), pp. 336-341.
5. Jones R. (1971), A Three-Factor Model in Theory Trade and History. In
Jagdish Bhagwati, Trade, Balance of Payments and Growth. Amsterdam,
North-Holland, pp. 3-21.
6. Krugman, P. (1979), Increasing Returns, Monopolistic Competition and
International Trade. Journal of International Economics, 9(4), 469-473.
7. Balassa, B. (1964), The Purchasing Power Parity Doctrine: A Reappraisal.
Journal of Political Economy, 72, pp. 584-596.
8. Kravis, I. And R.E. Lipsey (1983), Toward an Explanation of National Price
Levels. Princeton Studies in International Finance, 52.
9. Dornbusch, R. and P. Krugman (1976), Flexible Exchange Rates in the Short
Run. Brookings Papers on Economic Activity, 3, pp. 537-575.
Lecture 1. Introduction to the International Economics
1.
2.
3.
4.
5.
6.
International trade gains and international trade character;
Protectionism versus free trade;
Balance of payments;
Exchange rate determination;
International capital flows;
Macroeconomic policy in open economy.
(i) Part I. Models of International Trade
Lecture 2. Comparative Advantage and Ricardian Model
1.
2.
3.
4.
Absolute versus comparative advantages;
Comparative advantages and international trade gains;
Formal exposition of Ricardian model;
Ricardian model with continuum of goods (Dornbusch-Fisher-Samuelson
model).
Lecture 3. Specific Production Factors and Income Distribution
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
1. Specific versus mobile production factors;
2. Prices, wages and income distribution;
3. Formal exposition of Specific factor model.
Lecture 4-5. Resource Endowment and Heckscher-Ohlin model
1.
2.
3.
4.
Resource endowment and comparative advantages;
Heckscher-Ohlin model;
Relative price changes and Stolper-Samuelson theorem;
Resource endowment changes and Rybczynski theorem.
Lecture 6. Standard Model of International Trade
1.
2.
3.
4.
5.
6.
Production possibilities frontier and world demand;
Equilibrium in world market and equilibrium good and factor prices;
Terms of trade notion;
Supply changes effect on terms of trade;
Demand changes effect on terms of trade;
Import tariffs and export subsidies effect on terms of trade.
Lecture 7-8. Economy of Scale and Monopolistic Competition Model
1.
2.
3.
4.
5.
Imperfect competition and economy of scale;
Monopoly versus monopolistic competition;
Monopolistic competition model;
Monopolistic competition and international trade;
Interindustry versus intraindustry trade.
Lecture 9. Protectionism and Free Trade
1. What is protectionism?
2. Import tariffs and quotas;
3. Export subsidies and taxes.
(ii) Part II. Models of International Macroeconomics
Lecture 10. International Finance Markets
1. Foreign exchange markets;
2. Exchange rate regime;
3. Financial markets and international capital flows.
Lecture 11. Real Exchange Rate and International Trade
1.
2.
3.
4.
Nominal versus real exchange rates;
External and internal real exchange rates;
Real exchange rate effect on export and import;
Marshall-Lerner condition;
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Workshop “Teaching Modern Theoretical and Applied Macroeconomics”
European University at St. Petersburg
5. J-curve.
Lecture 12. International Capital Flows
1.
2.
3.
4.
5.
International capital flows mobility and immobility;
Capital control;
International capital flows and interest rate parity;
Covered and uncovered interest rate parity;
Risk premium.
Lecture 13. Mundell-Fleming Model
1.
2.
3.
4.
5.
IS-LM framework;
BP curve and external equilibrium;
Macroeconomic policy in small open economy with floating exchange rate;
Macroeconomic policy in small open economy with fixed exchange rate;
Role of capital control.
Lecture 14. Purchasing Power Parity
1.
2.
3.
4.
International arbitrage and law of one price;
Absolute versus relative PPP;
PPP drawbacks;
Balassa-Samuelson model.
Lecture 15. Exchange Rate Determination: Monetary Approach
1.
2.
3.
4.
Money market equilibrium;
PPP assumption;
Monetary model of exchange rate determination;
Monetary approach criticism.
Lecture 16. Dornbusch Model of Exchange Rate Determination
1. Formal exposition of Dornbusch model;
2. Monetary shock in Dornbusch model;
3. Exchange rate “overshooting”;
Lecture 17-18. Equilibrium Real Exchange Rate
1.
2.
3.
4.
5.
6.
7.
Equilibrium real exchange rate notion;
Internal and external balance;
Fundamental determinants of equilibrium exchange rate;
Equilibrium real exchange rate determination: single equation approach;
Equilibrium real exchange rate determination: trade equation approach;
Equilibrium real exchange rate determination: general equilibrium approach;
Real exchange rate misalignment.
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