Course Details

1. Identify the key concepts of macroeconomics, the objectives and instruments of macroeconomic analysis.
2. Analyze outcomes of economic activity: Gross Domestic Product, real and nominal GDP, price indexes and employment and unemployment.
3. Compare and contrast different approaches to measuring GDP
4. Identify and quantify aggregate expenditures; analyze their determinants and apply them in problem solving
5. Integrate concepts of macroeconomic equilibrium and appraise its dynamics.
6. Derive the simple and the complete multiplier and interpret its constraints.
7. Evaluate business fluctuations and apply the theory of business cycle to the analysis of the current economic slowdown.
8. Define and categorize the types of fiscal policy and debate their controversies

Introduction to macroeconomics:

Objectives of macroeconomic analysis. Main macroeconomic variables: output, employment, price level. Employment vs. unemployment. Aggregate supply and aggregate demand

Measuring macroeconomic activity:

Identifying GDP: final goods vs. intermediate goods; value added. Three approaches to measuring GDP. The expenditure approach. Economic decision makers and their spending. The Income approach. Primary income vs. final income. Factor payments vs. transfer payments. Income approach vs. expenditure approach. NDP and domestic income. Private income and disposable income. GDP deflator: real vs. nominal GDP. GDP shortcomings

Aggregate expenditures:

Consumption spending: consumption function and consumption curve. Factors, determining the slope of the consumption curve and factors, determining its position. The savings function. Gross private investment demand – definition, components and determinants. Government spending. The import’s function.

The dynamics of macroeconomic equilibrium:

Macroeconomic equilibrium: AE = Y.  Planned vs. actual spending and disequilibrium. The role of inventories. Injections and leakages. The equilibrium condition: Injections = Leakages.  The simple multiplier. The complete multiplier and its constraints. Macroeconomic fluctuations and the business cycle.

Fiscal policy:

Definition and typology.  Goals and instruments of fiscal policy. The government budget. Deficits and surpluses. The demand side fiscal policy: determinants and effectiveness. The budget multiplier. Empirical evidence on the effectiveness of fiscal policy.

• Violaris Ioannis, Economics a bilingual approach, Epiphaniou editions, 2008

• Samuelson & Nordhaus, Economics, McGraw Hill, 19th edition, 2008, or more recent one

Ex cathedra lectures and discussions in class, by means of traditional tools or using computer demonstrations. Some of the key issues are revealed on the basis of simulation games.

Auditory exercises, where examples regarding matter represented at the lectures, are solved and further, questions related to particular open-ended topic issues are compiled by the students and answered, during the lecture or assigned as homework.

Topic notes are compiled by students, during the lecture which serve to cover the main issues under consideration and can also be downloaded from the lecturer’s webpage. Tutorial problems are also submitted as homework and these are solved during lectures or privately during lecturer’s office hours. Further literature search is encouraged by assigning students to identify a specific problem related to some issue, gather relevant scientific information about how others have addressed the problem and report this information in written or orally.