With microeconomics, macroeconomics is one of the most fundamental fields in economics, dealing with the aggregated economic variables such as GDP, unemployment rate, price index, and so on.
This course provides a basic view of macroeconomics at the undergraduate level. The first half of this course covers measurement of macroeconomic activity, households' consumption-saving behavior, firms' production-investment behavior, and the role of financial asset markets and money. Then, the second half focuses on how major macroeconomic variables are determined in both long-run and short-run equilibria. We also discuss the effectiveness of fiscal and monetary policies.
The aim of this course is twofold. First, students can precisely explain the definitions of the aforementioned major macroeconomic variables which they roughly know through newspapers and evening news. Second, they can construct a simple mathematical model to analyze the mechanics of how the variables are determined.
By the end of this course, students will be able to:
1) Using the definitions, calculate major macroeconomic variables, including GDP, inflation rate, unemployment rate, current account, etc.
2) Understand how decisions made by economic agents (e.g., households and firms) determine such macroeconomic variables.
3) Explain the role of money, financial markets, and banks by using a simple model.
4) Grasp the differences between long-run and short-run macroeconomic equilibrium and discuss the effectiveness of fiscal and monetary policies in each time frame.
nominal GDP, real GDP, GDP deflator, consumption price index (CPI), unemployment rate, consumption, investment, saving, long-run macroeconomic equilibrium, economic growth theory
|✔ Specialist skills||✔ Intercultural skills||Communication skills||Critical thinking skills||Practical and/or problem-solving skills|
As stated in the "Course schedule," two times are used for one topic like household's behavior, firm's behavior, and so on.
|Course schedule||Required learning|
|Class 1||Introduction to Macroeconomics||Understand the purpose of macroeconomics and the meanings of macroeconomic variables observed in real life.|
|Class 2||Measuring the Macroeconomic Performance (1): Nominal GDP, Real GDP and Price Index||Explain the definition of GDP, the difference between nominal GDP and real GDP, and the role of price index.|
|Class 3||Households's Behavior (1): Intertemporal Choice of Consumption Plan in a Two-period model||Derive the optimal consumption through intertemporal utility maximization.|
|Class 4||Households's Behavior (2): Intertemporal Choice of Consumption Plan in a Two-period model||Explain the role of savings from the viewpoint of utility maximization.|
|Class 5||Firms' Behavior of Production of Investment (1)||Derive the optimal investment plan of firms.|
|Class 6||Firms' Behavior of Production of Investment (2)||Derive the optimal investment plan of firms.|
|Class 7||The Role of Financial Asset Markets for the Macroeconomy||Understand the role of financial asset markets for the macroeconomy.|
|Class 8||Money and the Central Bank||Understand the definition of money, and explain how the central bank affects us through monetary policy.|
|Class 9||Midterm Examination||Review of the first half of the course (classes 1-8)|
|Class 10||Long-run Macroeconomic Equilibrium (1): Determination of GDP in Equilibrium||Derive the two-period macroeconomic equilibrium with flexible prices.|
|Class 11||Long-run Macroeconomic Equilibrium (2): Effects of Fiscal Policy in the Long-run||Understand the role of the government in the long-run.|
|Class 12||Economic Growth Theory (1): The Solow Growth Model||Understand the Solow model.|
|Class 13||Economic Growth Theory (2): The Role of Technological Progress||Under stand the role of technological progress for economic growth|
|Class 14||Review of The Course||Review of the course.|
Handouts or slides used for each class will be available on the corresponding page of Tokyo Tech OCW-i.
Mankiw, N.G. Macroeconomics, Worth Publishing.
Futagami, K. and Hori, K. Macroeconomics, Yuhikaku (in Japanese)
Shibata, A. and Unayama, T. First Steps in Macroeconomics, Yuhikaku (in Japanese)
Hiraguchi R. and Inaba, M. Macroeconomics: From Basic Principles to Applications, Yuhikaku (in Japanese)
The grade is based on the midterm- and final assignments.
Although there is no explicit prerequisite for this course, basic knowledge of microeconomics covered in "Microeconomics I" is highly recommended.