Economic Fluctuations and Foundations of Macro Polici

lecon2021  2019-2020  Louvain-la-Neuve

Economic Fluctuations and Foundations of Macro Polici
Note from June 29, 2020
Although we do not yet know how long the social distancing related to the Covid-19 pandemic will last, and regardless of the changes that had to be made in the evaluation of the June 2020 session in relation to what is provided for in this learning unit description, new learnig unit evaluation methods may still be adopted by the teachers; details of these methods have been - or will be - communicated to the students by the teachers, as soon as possible.
5 credits
30.0 h
De la Croix David;
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...)

At the end of this learning unit, the student is able to :

1 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

The contribution of this Teaching Unit to the development and command of the skills and learning outcomes of the programme(s) can be accessed at the end of this sheet, in the section entitled “Programmes/courses offering this Teaching Unit”.
Teaching methods
Ex catedra teaching, exercices et applications.
Evaluation methods
 Written or oral evaluation to assess the students' understanding of the methods and tools seen in class.
Williamson, Macroeconomics, Pearson.
+ lectures choisies
Faculty or entity

Programmes / formations proposant cette unité d'enseignement (UE)

Title of the programme
Master [120] in Mathematical Engineering

Master [60] in Economics : General

Master [120] in Economics: General