Teaching Plan Information

Presentation

The course Introduction to Macroeconomics is fundamental in the curricula of IBE, ECO, ADE, and ECO/ADE/DRET students. The course aims to introduce you to the main economic questions that economies face and to acquire knowledge and skills that will be the fundamentals for your learning of Economic Theory in more advanced and specialized courses. This course, together with Introduction to Microeconomics - (the course you took during the first quarter), should be viewed as the first step of the training in Economic Theory for IBE, ECO, ADE and ECO/ADE/DRET students.

In the same way as Introduction to Microeconomics helped you understand how households and firms take decisions and interact in different markets, Introduction to Macroeconomics will help you understand how those interactions result in important economic aggregates; how those economic aggregates determine and influence each other; and how they simultaneously affect many households, firms and markets of a country or a set of countries. We will therefore study economic aggregates such as a country’s income per capita and economic growth, unemployment, inflation, and interest rates. Furthermore, we are going to analyze how economic policies, both monetary and fiscal, affect these economic aggregates. In particular, we will study the behavior of the main macroeconomic variables during the financial and the covid19 recessions. We will analyze the economic policies that were designed and implemented to alleviate these crises and their effectiveness in stimulating economic recovery. We will also study the recent energy crisis, the return of high inflation and the measures that policymakers are implementing.

As you can see, macroeconomics concerns real-world problems. You must be informed about what is going on in the world around you by regularly reading newspapers and magazines like the Financial Times, The Wall Street Journal, The Economist, Expansión, Cinco Días, or the economic sections of The New York Times, La Vanguardia, El País as well as their weekend special sections in economics. Blogs like Bruegel, VoxEU, or Nada es gratis are interesting to follow.

Associated skills

GENERAL COMPETENCES

Instrumentals

1. Analytical capabilities (of economic problems with the help of simple economic models).
2. Problem solving (applying simple economic models)
3. Ability to search information independently (on macroeconomic variables - in specified data bases, in the media, etc.).
4. Skills to present and discuss in public.

Interpersonal

1. Social skills to interrelate in small groups during the seminars (participate in discussions, give opinion, listen to views of others, etc.).

Systemic

2. Understand and analyze the economic facts that appear in the press or other media.
3. Skills to carry on individual learning (reading course material, problem solving, search information in the press and other media, etc.).

Learning outcomes

1. Identify macroeconomic problems.
2. Ability to understand and apply simple economic models.
3. Ability to relate the analysis of macroeconomic problems with the goals and instruments of economic policy.
4. Knowledge of the main macroeconomic variables and of the data sources where those variables can be found.

Sustainable Development Goals

The course provides analytical tools to study, among others, topics on economic growth, labor market, and potential inequalities that may arise as a result of economic decisions of the different agents.

Prerequisites

Basic knowledge of the decision processes of households and firms, and their interactions in markets, is required for the course. This knowledge has been acquired during the first quarter in the course Introduction to Microeconomics.

Contents

Topic 1. Introduction to Macroeconomics. Economic aggregates.

1.1   A look at the world economy                                                 BAG Ch. 1
                                                                                        

1.2   Main economic aggregates: definitions and concepts          BAG Ch. 2
                                                                                        

Topic 2. The goods market                                                        BAG Ch. 3
                                                                                              

Topic 3.  Financial markets: I                                                    BAG Ch. 4
                                                                                              

Topic 4. The IS-LM model                                                         BAG Ch. 5

Topic 5. Financial markets II                                                   BAG Ch.6

Topic 6. The labor market                                                       BAG Ch. 7

Topic 7. The Philips curve, the natural rate of unemployment and

Inflation                                                                                   BAG Ch. 8

Topic 8. Putting all markets together: from the short to the medium run                                                                                                                                                                                              BAG Ch. 9
                                                                                                  BI

Topic 9. Growth                                                                       BAG Ch 10, 11 and 12                                      

Teaching Methods

The course duration is 10 weeks. All students of a section meet weekly with the professor for two lectures of an hour and a half. Furthermore, for 7 weeks (starting on week 3), there will be weekly seminar sessions with smaller groups of students (sub-sections). Seminar sessions will be used to discuss in more depth the topics studied, to learn to relate the acquired knowledge to everyday economic issues and to solve problems that students have previously worked on their own or in group. We encourage students to work the problem sets in group, discuss them, and learn from other students.

Problem sets will not be handed in, but students need to know the solution to be able to discuss it in the seminar class. Instructors of seminars will lead the presentation of the solution of problem sets, encouraging students to participate in the discussion, to ask questions and to complement what has been presented in class. Attendance to seminars will be part of the continuous evaluation grade. Solutions will be available in Aula Global within a week after the seminar session meets.

Evaluation

Course evaluation will be based on the following criteria:

1. Grade from the final exam (75%)

The final exam will take place at the end of the quarter and will last for two hours. The exam will cover all material discussed and lectured in class, the recommended readings for each topic, the discussion and material from the seminars, and the problem sets that students have worked out during the quarter.

The final exam will consist of two parts: multiple choice and open questions, each valued 5 points out of a total of 10. To pass the course you need to get a minimum of 1.5 out of 5 in each part of the exam. In this case, the student’s final grade will be determined by the grade of the final exam (weighted 75%) plus the continuous evaluation (weighted 25%), and it must be no lower than 5 out of a total of 10 points to pass the course.

 If in any of the two parts of the exam the student does not obtain a minimum of 1.5 out of 5, the continuous evaluation will not be considered and the final grade will be the sum of the two parts of the exam, with a maximum grade of 4 out of 10.

2. Grade from the continuous evaluation (25 %)

This part of the grade will be based on the evaluation of all activities that will take place during the quarter: participation in seminars, short quizzes online. You can find the seminar group you belong to in Aula Global. All students must attend the assigned seminar’s group.

The activities that contribute to the grade are:

1. 8% Attendance and participation in the first SIX seminars, where problems sets will be solved by the instructor with the participation and discussion of the students. You can miss one seminar without penalty, so use it as a joker (comodín). No excuses will be accepted for additional absences (except from medical reasons causing a long-term illness). Each absence will have a zero and thus will have a penalty: zero points in 1.6% of your final grade).
2. 10% Seminar 7 - Content and presentation.
   You will work in small groups on a given topic. You will have to hand in an executive summary and make a presentation in class. More precise instructions will be given early in the course.
3. 7% Short weekly quizzes online.
   The link in Aula Global will be opened for 24 hours. You will have to answer a few questions randomly chosen from a given set.
   
   

3. Bonus points. The teachers may give bonus points to some students (up to a maximum of 0,4 points out of 10) for participating and adding value to specific activities during the lectures or seminars.

Re-sitting (recuperació) evaluation. Only for students that have taken the final exam and obtained at least 50% of the points in the continuous evaluation.  
It will be based on the following criteria:

1. Final exam: 75%.
   Students who did not pass the course at the end of the second term have a second chance to pass the course by retaking the final exam at the beginning of the third term. The retake final exam will consist of two parts: multiple choice and open questions, each valued 5 points out of a total of 10. To pass the course you need to get a minimum of 1.5 out of 5 in each part of the exam, in which case the grade of the final exam plus the continuous evaluation will determine the final grade. If in any of the two parts of the retake exam you do not obtain a minimum of 1.5 out of 5, the continuous evaluation will not be considered and your final grade will be the sum of the two parts of the retake exam, with a maximum grade of 4 out of 10
2. Continuous evaluation: 25%.

3. Bonus points will also be considered here

Bibliography and information resources

REFERENCES

In parenthesis and bold the abbreviation that we use in the course outline to specify the references that correspond to each Topic.

• Blanchard, O., Amighini, A. and Giavazzi, F., Macroeconomics. A European Perspective, Pearson Education Limited, third edition, 2017. (BAG)
• Blanchard, O. and Illing, G., The COVID 19 pandemic, mimeo 2021 (a copy will be published in Aula Global). (BI)

The third edition of BAG is significantly different from the first and second editions in a central part of the course. We will be following this third edition, which is an improvement for the two previous editions, and provides a better understanding of the financial crisis.

Note: For your information, this book has also been the main reference for Macroeconomics I (second year of the grau) for the last ten years.

Teaching Plan Information

Presentation

The course Introduction to Macroeconomics is fundamental in the curricula of IBE, ECO, ADE, and ECO/ADE/DRET students. The course aims to introduce you to the main economic questions that economies face and to acquire knowledge and skills that will be the fundamentals for your learning of Economic Theory in more advanced and specialized courses. This course, together with Introduction to Microeconomics - (the course you took during the first quarter), should be viewed as the first step of the training in Economic Theory for IBE, ECO, ADE and ECO/ADE/DRET students.

In the same way as Introduction to Microeconomics helped you understand how households and firms take decisions and interact in different markets, Introduction to Macroeconomics will help you understand how those interactions result in important economic aggregates; how those economic aggregates determine and influence each other; and how they simultaneously affect many households, firms and markets of a country or a set of countries. We will therefore study economic aggregates such as a country’s income per capita and economic growth, unemployment, inflation, and interest rates. Furthermore, we are going to analyze how economic policies, both monetary and fiscal, affect these economic aggregates. In particular, we will study the behavior of the main macroeconomic variables during the financial and the covid19 recessions. We will analyze the economic policies that were designed and implemented to alleviate these crises and their effectiveness in stimulating economic recovery. We will also study the recent energy crisis, the return of high inflation and the measures that policymakers are implementing.

As you can see, macroeconomics concerns real-world problems. You must be informed about what is going on in the world around you by regularly reading newspapers and magazines like the Financial Times, The Wall Street Journal, The Economist, Expansión, Cinco Días, or the economic sections of The New York Times, La Vanguardia, El País as well as their weekend special sections in economics. Blogs like Bruegel, VoxEU, or Nada es gratis are interesting to follow.

Associated skills

GENERAL COMPETENCES

Instrumentals

1. Analytical capabilities (of economic problems with the help of simple economic models).
2. Problem solving (applying simple economic models)
3. Ability to search information independently (on macroeconomic variables - in specified data bases, in the media, etc.).
4. Skills to present and discuss in public.

Interpersonal

1. Social skills to interrelate in small groups during the seminars (participate in discussions, give opinion, listen to views of others, etc.).

Systemic

2. Understand and analyze the economic facts that appear in the press or other media.
3. Skills to carry on individual learning (reading course material, problem solving, search information in the press and other media, etc.).

Learning outcomes

1. Identify macroeconomic problems.
2. Ability to understand and apply simple economic models.
3. Ability to relate the analysis of macroeconomic problems with the goals and instruments of economic policy.
4. Knowledge of the main macroeconomic variables and of the data sources where those variables can be found.

Sustainable Development Goals

The course provides analytical tools to study, among others, topics on economic growth, labor market, and potential inequalities that may arise as a result of economic decisions of the different agents.

Prerequisites

Basic knowledge of the decision processes of households and firms, and their interactions in markets, is required for the course. This knowledge has been acquired during the first quarter in the course Introduction to Microeconomics.

Contents

Topic 1. Introduction to Macroeconomics. Economic aggregates.

1.1   A look at the world economy                                                 BAG Ch. 1
                                                                                        

1.2   Main economic aggregates: definitions and concepts          BAG Ch. 2
                                                                                        

Topic 2. The goods market                                                        BAG Ch. 3
                                                                                              

Topic 3.  Financial markets: I                                                    BAG Ch. 4
                                                                                              

Topic 4. The IS-LM model                                                         BAG Ch. 5

Topic 5. Financial markets II                                                   BAG Ch.6

Topic 6. The labor market                                                       BAG Ch. 7

Topic 7. The Philips curve, the natural rate of unemployment and

Inflation                                                                                   BAG Ch. 8

Topic 8. Putting all markets together: from the short to the medium run                                                                                                                                                                                              BAG Ch. 9
                                                                                                  BI

Topic 9. Growth                                                                       BAG Ch 10, 11 and 12                                      

Teaching Methods

The course duration is 10 weeks. All students of a section meet weekly with the professor for two lectures of an hour and a half. Furthermore, for 7 weeks (starting on week 3), there will be weekly seminar sessions with smaller groups of students (sub-sections). Seminar sessions will be used to discuss in more depth the topics studied, to learn to relate the acquired knowledge to everyday economic issues and to solve problems that students have previously worked on their own or in group. We encourage students to work the problem sets in group, discuss them, and learn from other students.

Problem sets will not be handed in, but students need to know the solution to be able to discuss it in the seminar class. Instructors of seminars will lead the presentation of the solution of problem sets, encouraging students to participate in the discussion, to ask questions and to complement what has been presented in class. Attendance to seminars will be part of the continuous evaluation grade. Solutions will be available in Aula Global within a week after the seminar session meets.

Evaluation

Course evaluation will be based on the following criteria:

1. Grade from the final exam (75%)

The final exam will take place at the end of the quarter and will last for two hours. The exam will cover all material discussed and lectured in class, the recommended readings for each topic, the discussion and material from the seminars, and the problem sets that students have worked out during the quarter.

The final exam will consist of two parts: multiple choice and open questions, each valued 5 points out of a total of 10. To pass the course you need to get a minimum of 1.5 out of 5 in each part of the exam. In this case, the student’s final grade will be determined by the grade of the final exam (weighted 75%) plus the continuous evaluation (weighted 25%), and it must be no lower than 5 out of a total of 10 points to pass the course.

 If in any of the two parts of the exam the student does not obtain a minimum of 1.5 out of 5, the continuous evaluation will not be considered and the final grade will be the sum of the two parts of the exam, with a maximum grade of 4 out of 10.

2. Grade from the continuous evaluation (25 %)

This part of the grade will be based on the evaluation of all activities that will take place during the quarter: participation in seminars, short quizzes online. You can find the seminar group you belong to in Aula Global. All students must attend the assigned seminar’s group.

The activities that contribute to the grade are:

1. 8% Attendance and participation in the first SIX seminars, where problems sets will be solved by the instructor with the participation and discussion of the students. You can miss one seminar without penalty, so use it as a joker (comodín). No excuses will be accepted for additional absences (except from medical reasons causing a long-term illness). Each absence will have a zero and thus will have a penalty: zero points in 1.6% of your final grade).
2. 10% Seminar 7 - Content and presentation.
   You will work in small groups on a given topic. You will have to hand in an executive summary and make a presentation in class. More precise instructions will be given early in the course.
3. 7% Short weekly quizzes online.
   The link in Aula Global will be opened for 24 hours. You will have to answer a few questions randomly chosen from a given set.
   
   

3. Bonus points. The teachers may give bonus points to some students (up to a maximum of 0,4 points out of 10) for participating and adding value to specific activities during the lectures or seminars.

Re-sitting (recuperació) evaluation. Only for students that have taken the final exam and obtained at least 50% of the points in the continuous evaluation.  
It will be based on the following criteria:

1. Final exam: 75%.
   Students who did not pass the course at the end of the second term have a second chance to pass the course by retaking the final exam at the beginning of the third term. The retake final exam will consist of two parts: multiple choice and open questions, each valued 5 points out of a total of 10. To pass the course you need to get a minimum of 1.5 out of 5 in each part of the exam, in which case the grade of the final exam plus the continuous evaluation will determine the final grade. If in any of the two parts of the retake exam you do not obtain a minimum of 1.5 out of 5, the continuous evaluation will not be considered and your final grade will be the sum of the two parts of the retake exam, with a maximum grade of 4 out of 10
2. Continuous evaluation: 25%.

3. Bonus points will also be considered here

Bibliography and information resources

REFERENCES

In parenthesis and bold the abbreviation that we use in the course outline to specify the references that correspond to each Topic.

• Blanchard, O., Amighini, A. and Giavazzi, F., Macroeconomics. A European Perspective, Pearson Education Limited, third edition, 2017. (BAG)
• Blanchard, O. and Illing, G., The COVID 19 pandemic, mimeo 2021 (a copy will be published in Aula Global). (BI)

The third edition of BAG is significantly different from the first and second editions in a central part of the course. We will be following this third edition, which is an improvement for the two previous editions, and provides a better understanding of the financial crisis.

Note: For your information, this book has also been the main reference for Macroeconomics I (second year of the grau) for the last ten years.