The main objective is to present the basic foundations of macroeconomic theory, starting with the basic macroeconomic model in the long run where prices are flexible. Next, we wil study the long run using the Solow model and we will study the effects of fiscal and monetary policies. Next, we turn to study the short run, when prices are rigid. We will analyze the evidence about fluctuations in GDP and its components and the effects of fiscal and monetary policies.
PART 1: Classical Theory
1. Natinal income, relationhsip between factor marginal productivity and prices. Factoral distribution of GDP. relationhsip between public and private savings and investment in the logn run.
2. Money and inflation. The quantitative theory of money. The Fisher equation.
PART 2: Growth: Solow model. Population and technological growth.
PART 3: Unemployment
PART 4: Business cycles.
1. The IS-LM model for the closed economy.
2. The Mundell-Fleming model for the open economy.
PART 5: Economic policy debates