Macroeconomic Concepts

and Issues

Professor Dermot McAleese and Alan Matthews

MSc EPSHilary Term 2011

Module Statement

Introduction to best practice macroeconomics

Focuses on issues and concepts of practical relevance

Explains changes in global economic environment

Analyses implications for policy

Course Outline

1.     The Economic Policy Framework for the 21st century (DMcA 1)2.     Gross Domestic Product (GDP) and Business Fluctuations (DMcA 11,16) 3.     What Makes Nations Grow? (DMcA 2) 4.     Stabilising the Economy: Central Banks and Monetary Policy (DMcA 12, 13)5. Fiscal Policy, Budget Deficits and Public Debt (DMcA 14, 15)6. Trade and protectionism (AM 17)  7.     Competitiveness in a global economy: productivity, exchange rates and

prices (AM 21)  8.   EU economic policy issues: shaping the EU budget (AM 9)  9.      EU economic policy issues: Climate change policies (AM 21)10. Contemporary challenges for the global economy: overview and summary

(AM 20)

Reading

Economics for Business Dermot McAleese 3rd Edition Financial Times/Prentice Hall 2004

Additional Readings (e.g. reports by OECD, IMF etc) Supplementary tables

ASSESSMENT

Assessment will consist of a final end of year examination (70% of overall mark) and term project (30% of overall mark). The final examination will be a three-hour test, 8 questions answer 4. Details of the term project will be provided in class. The project should be submitted not later than the end of the 8th week of the module.

OBJECTIVES

To provide understanding of the market system

To develop a critical analysis of current economic policies

To enable participants to contribute to the debate about economic issues

Who is Dermot McAleese?

Chair, Institute for International

Integration StudiesLectures in Dublin, Paris,

Casablanca, ShanghaiExecutive courses, Irish

Management InstituteEconomic consultant to

government and business

Pro Chancellor, Trinity CollegeDublin

Recent events

“The teachers now have some problems.”

Wang Qishan, China’s Vice Premier to his American counterparts at Sino America summit in October 2008.

IMF economic forecasts

Review (updated data to be circulated in class)

Downside risks flagged in 2006/7 IMF reports Oil and energy prices

External imbalances

Financial fragility (hedge funds)

Higher interest rates and the housing market

IMF forecasts for world output 2009

Date of forecast Jul 08 3.9% Oct 08 3.0% Nov 08 2.2% Jan 09 0.5% Apr 09 -1.3% July 09 -1.4%

Oct 09 -1.1% ............ 3.1% for 2010

Oct 10 -0.6% ……. 4.8% for 2010

…………. 2.5% for 2010

Oct 2010

Source: IMF World Economic Outlook Oct 2010

Class Exercise (15 minutes)

Write down four questions on economics that you would like to have answered by this module