Advanced Macroeconomic Analysis

SØK3003 presents detailed analyses of theories of employment, inflation, business cycles, economic growth, and problems related to the balance of payment. Among other things we discuss how expectations are formed, inter-temporal adaptation, and consequences of macroeconomic politics such as monetary- and income distribution politics. The main emphasis will be on the formation of macroeconomic politics in open economies with extensive foreign trade.

Knowledge
You learn
- how portfolio models can be used to analyze the foreign exchange market
- how an inflation target for the monetary policy works in an open economy
- about the sources of long term economic growth (the Solow-model, the Ramsey-model and new growth theory)
- how government budget deficits affect demand in the economy (Ricardian equivalence)
- how pension systems affect savings and economic growth (model with overlapping generations)
- how the lack of wage flexibility can contribute to unemployment (theories of efficiency wages and trade unions)

Skills
You should be able to
- explain the main theories of foreign exchange markets, business cycles, unemployment and economic growth
- analyze a wide range of macroeconomic issues by using relevant economic models

General competence
You should be able to
- read and understand research papers on the topics of this course

4 hours of lectures every week and 2 hours of practical assignments every second week. Compulsory activity: 2 approved term papers.