The course introduces students to key topics of macroeconomic theory and policy. After successful completion of the course, students are expected to:

• Have the ability to recognize a country’s main macroeconomic problems
• Understand the way an economy operates at the macro-level in the short- and medium term
• Understand the effects of economic policy on output, employment and the price level
• Understand the process of adjustment of the economy to exogenous shocks
• Are able to use functional relationships, diagrams, and the findings of empirical research to suggest ways to address/resolve macroeconomic problems
• Are able to solve exercises, finding values for  the key macroeconomic variables  and calculating  how they may change following external shocks or economic-policy changes

Macroeconomic objectives, macroeconomic models. Short-run equilibrium in the goods market. Equilibrium in the money market. The IS-LM model, multipliers. Effectiveness of fiscal & monetary policy, short-run effects of exogenous shocks. The aggregate demand function.  Adjustment of the price level. The labour market, wages & employment. Imperfections in the labour market (mismatch, tax distortions, unions, efficiency wages, labour contracts). General equilibrium, the AD-AS model.  Determination of output, employment and the price level. Dynamic adjustment to exogenous shocks and to economic-policy changes. Cases of malfunctioning of the adjustment mechanism (liquidity trap, inelastic investment demand, nominal/real interest rates). The Okun relationship. Expectations, the Phillips curve. Risk premiums in money & capital markets, the extended IS-LM model. Liquidity trap, QE. Oil prices, output & employment.

Lectures (4hours per week) and Tutorials (2hours per week)

The overall course grade is the sum of: a) the final exam grade times 70% b) the (compulsory) mid-term exam grade times 30%, plus c) 20 percent of a mid-term (optional) exam grade.

The curriculum, samples of analytical questions, the assessment method of the course and other relevant material are available on the e-class platform and are accessible to all students.

Use of IT in teaching, and in communication with the students (e-class)