Economic Fluctuations and Foundations of Macro Policy [ LECON2021 ]
5.0 crédits ECTS
30.0 h + 12.0 h
1q
| Teacher(s) |
De la Croix David ;
|
| Language |
French
|
Place
of the course |
Louvain-la-Neuve
|
| Main themes |
We start with an emprical part, in which we decompose macroeconomic time series into trend and cycle compo-nents. The inspection of cyclical parts gives then hints to build and evaluate subsequent theory. To study the key tradeoff mentionned above, we develop a two-period model which allows to introduce expectations in a simple way. The method the consists in analyzing the general equilibrium and its properties. We shall at least develop the following themes: Effect of productivity shocks, effect of fiscal policy and its financing, openess to trade, money and inflation, exchange rate regimes. We shall also compare the predictions of the neoclassical approach with the one with the Keynesian ISLM ones which have been seen in the BA course. We all compare with a multiple equilibria set-up. During the lectures, we shall establish numerous links with other courses (for exam-ple one can discuss the first welfare theorem, the theory of comparative advantages...)
|
| Aims |
The objective of this macroeconomic course is to model the aggregate behavior of households and firms, to study the role of the government, to provide a toolbox to analyze the developed countries, and to evaluate the effects of macroeconomic policy. At the end of the course, students should have the following four competen-cies. (1) To understand some important tradeoffs agents face (consumption/leisure, consumption/saving, money holdings/bond holdings, investment by firms). (2) To know how these tradeoffs are modified by the fundamen-tal parameters of the economy, by expectations and by policies. (3) To be able to analyze the global conse-quences of individual choices and the determination of equilibrium. (4) TO understand how this equilibrium is affected by shocks.
|
| Content |
The building blocs
A - intro, B - measuring the cycle, C - the consumption - leisure tradeoff, D- firms, E - static general equilib-rium, F - the consumption - saving tradeoff, G - Ricardian equivalence
Fulfledged models
H - Dynamic general equilibrium, I - Money, J - Inflation, K - alternative model 1: IS-LM, L - alternative model 2: multiple equilibria
Extensions
M - International trade, N - capital mobility, O - Exchange rates
Application
P- the great depression
|
| Other information |
Prerequisite: Macroeconomics Analysis (eg book Blanchard)
Microeconomics
Support: transparent Portfolio
Book: Williamson, Macroeconomics, Pearson, 2005
|
Cycle et année
d'étude |
> Master [60] in Economics : General
> Master [120] in Economics: General
> Master [120] in Mathematical Engineering
> Master [120] in Statistics: General
> Master [120] in Agricultural Bioengineering
|
Faculty or entity
in charge |
> ECON
|
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