114-0403/06 – Macroeconomics B (MAEB)

Gurantor departmentDepartment of EconomicsCredits5
Subject guarantorprof. Ing. Zuzana Kučerová, Ph.D.Subject version guarantorprof. Ing. Martin Macháček, Ph.D. et Ph.D.
Study levelundergraduate or graduateRequirementCompulsory
Year1Semestersummer
Study languageCzech
Year of introduction2012/2013Year of cancellation2014/2015
Intended for the facultiesEKFIntended for study typesFollow-up Master
Instruction secured by
LoginNameTuitorTeacher giving lectures
JAN914 Ing. Lenka Janíčková, Ph.D.
LOK02 Ing. Aleš Lokaj, Ph.D.
MAH11 prof. Ing. Martin Macháček, Ph.D. et Ph.D.
MEL044 doc. Ing. Aleš Melecký, Ph.D.
SUL080 Ing. Monika Šulganová, Ph.D.
WRO25 Ing. Tomáš Wroblowský, Ph.D.
Extent of instruction for forms of study
Form of studyWay of compl.Extent
Part-time Credit and Examination 6+6

Subject aims expressed by acquired skills and competences

- analyze the short-run, medium-run, and long-run macroeconomic phenomena and processes by formal models - compare the mainstream macroeconomic theories and identify their strenghts and weaknesses - explain the consequences of monetary and fiscal policies within competing macroeconomic models - calculate the equilibrium values of aggregate output, price level, interest rate and other variables and changes in these values in response to macroeconomic policies - contrast the closed economy models and open economy models with differing rate of capital mobility - evaluate the importance of alternative macroeconomic approaches and methodologies for generating social welfare

Teaching methods

Lectures
Seminars

Summary

The aim of the subject is to both deepen and expand students´ knowledge of macroeconomic phenomena acquired in the first year of their studies. The subject covers various areas of mainstream macroeconomic theory at the intermediate level. Unlike introductory macroeconomics ("Macroeconomics A") course, this subject strongly emphasizes microeconomic foundations of macroeconomic theories and thus requires sound knowledge of basic economic principles. Within the subject, neo-Keynesian, monetarist, new classical and new Keynesian doctrines are confronted and discussed.

Compulsory literature:

BARRO, Robert J., Angus CHU a Guido COZZI. Intermediate Macroeconomics. Cengage Learning, 2017. ISBN 978-1473725096. BURDA, Michael a Charles WYPLOSZ. Macroeconomics – A European Text. 7th ed. Oxford: Oxford University Press, 2017. 624 p. ISBN 978-0198737513. KRUGMAN, Paul R. a Robin WELLS. Macroeconomics. Fourth edition. New York: Worth Publishers, 2015. ISBN 978-1-4641-1037-5.

Recommended literature:

DORNBUSCH, Rudiger, Stanley FISCHER and Richard STARTZ. Macroeconomics. 13th edition. New York: McGraw-Hill Education, 2017. 672 p. ISBN 978-1259290633. MANKIW, Gregory. Macroeconomics. 10th edition. New York: Macmillan International Higher Education, 2019. ISBN 978-1-319-24358-6. ROMER, David. Advanced macroeconomics. Fifth edition. New York, NY: McGraw-Hil, 2019. McGraw-Hill series in economics. ISBN 978-1-260-18521-8.

Way of continuous check of knowledge in the course of semester

E-learning

Other requirements

study of recommended literature

Prerequisities

Subject has no prerequisities.

Co-requisities

Subject has no co-requisities.

Subject syllabus:

1. The IS-LM model. - Interest rate as a determinant of aggregate demand. - Goods and services market and the IS curve. - Money market and the LM curve. - General equilibrium in a closed economy. - Fiscal policy multipliers. - Monetary Policy multipliers. 2. Fiscal and monetary policies in the IS-LM model. - Efficiency of fiscal and monetary policies: the case of „liquidity trap“. - Efficiency of fiscal and monetary policies: the „Classical“ case. - Partial and complete crowding-out effects of fiscal expansionary policy. - Central bank dilemma. - The Keynesian monetary transmission mechanism. - Fiscal and monetary policy mix. 3. The augmented IS-LM model. - Shortcomings of the simple version of IS-LM model. - Term structure of interest rates. - The yield curve as an indicator of future recessions and expansions. - Inflation expectations, maturity premium and the interest-rate gap. - Derivation of the ALM curve from the LM curve. IS-ALM model. - Limitations of macroeconomic policies in the globalized financial markets. 4. Aggregate demand and aggregate supply. - Derivation of the AD curve from the IS-LM model. - Impact of the fiscal and monetary policies on the AD curve. - Neoclassical model of aggregate supply. Production function as an output-employment relationship. - Keynesian model of aggregate supply. Fixed prices and wages in the short-run. - Friedman´s model of aggregate supply. Asymetric information in the labour market. Adaptive expectations. - The Lucas model of aggregate supply. Imperfect information and the rational expectations. 5. The macroeconomics of imperfect competition. - New Keynesian macroeconomics. - Monopolistic competition and the mark-up price setting. - Nominal rigidities. Price and wage contracts. Menu costs. - Real rigidities. Efficiency wages. Credit rationing. - Monopolistic competition in the long-run. Entry-exit models. - The New Keynesian policy recommendations. 6. Unemployment and inflation. - Original Phillips curve with wage changes and its later modifications. - The short-run trade-off between inflation and unemployment. - Natural rate of unemployment and the NAIRU. - Phillips curve and the AS-AD model. - Taylor curve - the inflation-output trade-off. - Expected inflation, dynamic aggregate demand (DAD), and dynamic aggregate supply (DAS). - Monetary and fiscal policies in the DAS-DAD model. 7. Consumption, investment and the business cycle. - Simple aggregate consumption function. The Kuznets puzzle. - The life-cycle hypothesis. The permanent income hypothesis. - Barro-Ricardo equivalence hypothesis. - Tobin´s „q“ theory of investment. - Business cycles with deterministic trend. Business cycles with stochastic trend. - The intertemporal substitution hypothesis. Real-business-cycle model with technology shocks. Endogenous money supply. - Stylized facts of business cycles. 8. Economic Growth. - Economic growth and economic development. - Solow-Swan model of economic growth. Cobb-Douglas production function with constant returns to scale. - Investment and capital depreciation. The process of capital accumulation. - Steady-state growth and its determinants. - Consumption-per-capita maximization. The „golden rule“. - Empirical problems of the Solow-Swan growth model. New growth theory. - Alternative measurement of the capital stock in an economy. Human capital. - Endogenous technology development. R&D models. 9. The IS-LM-BP model. - The IS function in an open economy. - Net export function with a real exchange rate. - The LM function under fixed and floating exchange rates. - Interest rate spread and the net capital inflow. - The BP curve, its components, steepness, and shifts. - Mundell-Fleming model. - External imbalance in the Mundell-Fleming model – adjustment under alternative exchange rate regimes. 10. Fiscal and monetary policies in the IS-LM-BP model. - Efficiency of fiscal and monetary policies in the Mundell-Fleming model: the case of fixed exchange rates. - Efficiency of fiscal and monetary policies in the Mundell-Fleming model: the case of floating exchange rates. - Efficiency of fiscal and monetary policies in an economy with limited capital mobility. - Efficiency of fiscal and monetary policies in an economy with internationally immobile capital. - Several limitations of macroeconomic analysis in the IS-LM-BP model framework.

Conditions for subject completion

Part-time form (validity from: 2012/2013 Winter semester, validity until: 2014/2015 Summer semester)
Task nameType of taskMax. number of points
(act. for subtasks)
Min. number of pointsMax. počet pokusů
Exercises evaluation and Examination Credit and Examination 100 (100) 51
        Exercises evaluation Credit 35 (35) 18
                Zápočtová písemka Written test 35  18
        Examination Examination 65  28 3
Mandatory attendence participation:

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Conditions for subject completion and attendance at the exercises within ISP:

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Occurrence in study plans

Academic yearProgrammeBranch/spec.Spec.ZaměřeníFormStudy language Tut. centreYearWSType of duty
2014/2015 (N6202) Economic Policy and Administration (6202T055) Public Economics and Administration K Czech Ostrava 1 Compulsory study plan
2014/2015 (N6208) Economics and Management (6208T020) Business Economics K Czech Ostrava 1 Compulsory study plan
2014/2015 (N6208) Economics and Management (6208T037) Management K Czech Ostrava 1 Compulsory study plan
2013/2014 (N6208) Economics and Management (6208T037) Management K Czech Ostrava 1 Compulsory study plan
2013/2014 (N6208) Economics and Management (6208T037) Management (02) Management K Czech Ostrava 1 Compulsory study plan
2013/2014 (N6202) Economic Policy and Administration (6202T055) Public Economics and Administration K Czech Ostrava 1 Compulsory study plan
2013/2014 (N6202) Economic Policy and Administration (6202T055) Public Economics and Administration (02) Public Economics and Administration K Czech Ostrava 1 Compulsory study plan
2013/2014 (N6208) Economics and Management (6208T020) Business Economics K Czech Ostrava 1 Compulsory study plan
2013/2014 (N6208) Economics and Management (6208T020) Business Economics (02) Business Economics K Czech Ostrava 1 Compulsory study plan
2012/2013 (N6202) Economic Policy and Administration (6202T055) Public Economics and Administration (02) Public Economics and Administration K Czech Ostrava 1 Compulsory study plan
2012/2013 (N6208) Economics and Management (6208T020) Business Economics (02) Business Economics K Czech Ostrava 1 Compulsory study plan
2012/2013 (N6208) Economics and Management (6208T037) Management (02) Management K Czech Ostrava 1 Compulsory study plan

Occurrence in special blocks

Block nameAcademic yearForm of studyStudy language YearWSType of blockBlock owner

Assessment of instruction



2014/2015 Summer
2014/2015 Winter
2013/2014 Summer
2013/2014 Winter
2012/2013 Summer
2012/2013 Winter