Jigjiga University Collage of Business and Economics Department of Economics Course Name: Macroeconomics Course Code: Econ-1052 Credit H: 3 hrs. Instructor: Ahmed M Description Macroeconomics Course Econ-1052 Course code Cr Hrs 3 EtCTS 5 Course Description Macroeconomics focus mainly on short run analysis of an economy or business cycle. Hence, the main aim of this course is to present and discuss the different views of economists (as represented by school of thought) on how an economy behaves in the short run, how equilibrium is achieve in the short run, and the role of market forces and government in short run economic stabilization. For this purpose, this course divided in to three parts: Introduction, aggregate demand and supply analysis of a closed economy, and the analysis of open economy macroeconomics. The course also includes to discuss in to four sections to present and discuss long run analysis of an economy or economic growth, Course objective In this module the students are exposed to look at the aggregate analysis of an economy and the interrelationship between various aggregate economic variables. It also incorporates the monetary and fiscal policy instruments through which government can influence the value and dynamics of aggregate economic variables and thereby the performance of economies. Generally, the module enhances the knowledge of the students regarding the functioning of the economy as a whole as well as the rest of the world thereby to develop a closer link between academic learning and the professional practice in analyzing various economic aspects. 1 Schedules of lecture time, Topics and Reading materials We Lecture ek (Hour) Topics Of Lecture Main Reference Chapter 1: The State of Macroeconomics – Introduction 6 hour 1.1 What macroeconomics is about? N.GregoryMankiw, 2007, 1.2 Basic Concepts and Methods of Macroeconomics Macroeconomics 4 th Analysis edition 1.3 Macroeconomic Goals and Instruments William H. Branson, 1.4 The State of Macroeconomics: Evolution and Recent 2006 Developments Macroeconomic Classical macroeconomics Theory and Policy Keynesian macroeconomics Neo-classical macroeconomics Chapter 2: National Income Accounting 8 hour 2.1 The concepts of GDP and GNP 2.2 Approaches of measuring national income (GDP/GNP) N.GregoryMankiw, 2007, 2.3 Other Social Accounts (GNP, NNP, NI, PI and DI) Macroeconomics 4 th 2.4 Nominal versus Real GDP edition 2.5 The GDP Deflator and the Consumer Price Index William H. Branson, 2.6 GDP and Welfare 2006 2.7 The Business Cycle Macroeconomic 2.8 Unemployment and Inflation Theory and Policy Chapter 3:Aggregate Demand in the closed Economy 14 hour 3.1. Foundations of Theory of Aggregate Demand 3.2. The Goods Market and the IS curve 3.3. The Money market and the LM curve 3.4. The Short Run Equilibrium 3.5. From the IS-LM to Aggregate demand N.GregoryMankiw,2 007, Macroeconomics 4 th edition William H. Branson, 2006 Macroeconomic Theory and Policy 2 Chapter 4:Aggregate Demand in the Open Economy 12 hour 4.1.International flows of Capital Goods N.GregoryManki 4.2. Saving and Investment in the Small Open Economy w, 4.3.Exchange rates Macroeconomics 4.4.The Mundell-Fleming model 4th edition 4.5.fiscal and monetary policies in an open economy with 2007, William H. perfect capital mobility Branson, 2006 Fixed exchange rate Macroeconomic Floating exchange rate Theory and Policy 4.6 Limitations of the Mundell-Fleming model Chapter 5: Models of Macroeconomic Growth 8 hour 5.1 Introduction: Modeling Economic Growth 5.2 Theories of Economic Growth 5.2.1 The Harrod-Domar Growth Model 5.2.2 The Neo-classical Growth model 5.2.3 Endogenous Growth Theory N.GregoryManki w, 2007, Macroeconomics 4th edition William H. Branson, 2006 Macroeconomic Theory and Policy Chapter 6: Behavioral Foundations : theories of consumption 6 hour 6.1 the Keynesian consumption Function 6.1 the early empirical successes 6.2 secular Stagnation, Simon Kuznets and the consumption puzzle 6.3 Irvin Fischer’s Model 6.4 Modigiani’s Life cycle Hypothesis model 6.5 Friedman’s permanent income Hypothesis 6.6 Hall’s Random Walk model Rational expectations Adaptive expectations Naïve expectations 3 Course Policy Late coming is not allowed and no student is allowed to enter after class has started. Duplication of assignments is strictly forbidden; it entails serious penalty. Assignments are required to be submitted before or on the deadline. Cheating during exam sessions results in a minimum of “F “grade while cheating in quizzes and tests is subjected to a zero mark. All cheating cases will be reported to the department for further considerations. Students should switch off their cell phones while they are in class and must keep their cell phones switched off during all kinds of exam sessions. Students must attend 80% of the class for the course. Failure to attend 80% of the class will not allow the student to sit for the final exam. Missing a quiz without convincing evidences will earn the students a grade of zero marks in that specific quiz Reference: Text Books 1. N. Gregory Mankiw, 2007, Macroeconomics 4th edition Worth Publishers USA 2. William H. Branson, 2006 Macroeconomic Theory and Policy 3. Dornbusch, R. and S. Fischer: Macroeconomics Additional readings 4. Eduard Shapiro, 2007. Macroeconomic Analysis 5th edition New Delhi 5. Olivier Blanchard, 1997.Macroeconomics Prentice Hall Inc. New jersey USA 6. Frederick Mishkin, 1998. The Economics of Money, Banking and Financial Markets 5th edition USA. 7. Colander, 2001. Macreconomics 4th edition Newyork. 4