Macroeconomics

This subject is an introduction to advanced study of macroeconomics. An integrated theoretical framework – a simple life cycle model – is used to explore the central issues of macroeconomics. Major topics to be covered include: income determination and economic growth, economic fluctuations and business cycle, fiscal and monetary policy, open economy and international trade. The overall objective of this subject is to provide students with an integrated neoclassical approach to address substantive macroeconomic questions so as to improve their critical thinking and analytical skills and enhance their understanding of aggregate economic behaviour.

• 1Understand the development of macroeconomic thought and major macroeconomic theories;
• 2Use the life cycle model to explain economic growth and identify important factors that lead to income differences across countries;
• 3Analyse and simulate the dynamic responses of economic aggregates following changes in productivity, population, economic policies, and so on;
• 4Extend the life cycle model to include fiscal policy and money to analyse the short-run and long-run economic effects of certain fiscal and monetary policy; and
• 5Use a two-country life cycle model to analyse important questions related to international trade and open economy.