ECON2450: Intermediate Macroeconomic Theory II 

Semester: Fall and Winter

Offered: 2024

The purpose of this course is to introduce you to a set of topics and policy issues pertaining to the macroeconomy, and to provide you with the theoretical tools and foundations to understand them. The course will examine the problems of inflation, unemployment, and government deficits; consumption and savings in closed and open economy settings, credit market imperfections; as well as monetary policy issues, focusing on the role of expectations.

Current syllabus

Class material posted on eClass​

Topics outline:

1. ​IS-LM models

   1. The Keynesian multiplier

   2. The budget deficit

   3. The IS-LM model

   4. The Mundell-Fleming (IS*-LM*) model

2. Labor markets

   1. Perfect competition

   2. Union wage setting

   3. Efficiency wages

   4. Search

3. Intertemporal models

   1. ​Budget constraints

   2. Preferences

   3. Applications

      1. Closed economy

      2. Open economy

      3. Credit market imperfections

4. Monetary policy

   1. Theories of price determination

   2. ​Fixed vs. flexible prices

   3. Predetermined prices

   4. ​Dynamic (or time) consistency

      1. ​Commitment

      2. Discretion

5. ​Political economy