4410 – Introductory dynamic macroeconomics
Course description
Course content
The course gives and elementary but concise introduction to dynamic models and dynamic analysis in macroeconomics. The method of dynamic analysis is applied to wage-and price formation and inflation, and to fiscal policy and monetary policy analysis in an open economy context. The course also contains an introduction to the real business cycle model. At the beginning of the course we explain why a dynamic approach is required to understand and predict how an economy realistically reacts to shocks or a policy change. The course gives a step-by-step introduction to the key theoretical concepts relating to statics and dynamic analysis and to the corresponding model types. The supply side of the open economy, is one main area of application of dynamic analysis, and the course shows how competing models of wage and price setting can be formulated within one and the same dynamic framework, and how the different models lead to different predictions about how the economy react to shocks and policy changes. In the analysis we are also able to integrate the market for foreign exchange and the choice of monetary policy regime (instruments and targets) and to show that the dynamic response of the macro economy is regime-dependent. Since the emphasis is on dynamics analysis for the ‘policy horizon’ the models are formulated in discrete (calendar) time.
Learning outcome
Knowledge outcomes:
In the course extends the conceptual macroeconomic framework from static models (such as the Keynesian income-expenditure models) to dynamic models. You learn how to define and recognize static and dynamic models. You learn how the static models you know from before can be re-interpreted within a dynamic framework. You also learn under which assumptions a a static analysis is a relevant approximation to real life behavior, and when an explicit dynamic analysis is required. You learn the distinction between short-run effects of policy changes, the dynamic effects, and the long-run effects, and how to make these concepts precise. You learn how to solve simple dynamic models with the aid of algebra, and how to solve more complex model qualitatively.
Skills:
You will be able to formulate dynamic models in discrete time, and to use start using them in substantive application, for example in connection with the master thesis. Having formulated the model you can derive a full set of dynamic multipliers for simple models, and the short-run and long-run multipliers for more complex models. You can also use simple dynamic models to understand the principles of rational economic forecasting. You will be able to rationalize why multipliers depend on theoretical choices or assumptions, as well as on policy regimes. Building on these skills you have a good background for further studies in macroeconomic dynamics, for example for a course in optimization based macroeconomic theory, in open economy macroeconomics, or in economic growth theory; or in a course in time series econometrics.
Admission
Students who are admitted to study programmes at UiO must each semester register which courses and exams they wish to sign up for in Studentweb.
Students enrolled in other Master's Degree Programmes can, on application, be admitted to the course if this is cleared by their own study programme.
If you are not already enrolled as a student at UiO, please see our information about admission requirements and procedures.
Prerequisites
Formal prerequisite knowledge
Bachelor's degree in Economics, or equivalent. Students in the 5-year master programme (SVM5-ECON) must have taken ECON2310 – Makro?konomi 2 before they can take ECON4410.
Overlapping courses
- 10 credits overlap with ECON3410 – Introductory dynamic macroeconomics (discontinued)
- 10 credits overlap with S?K2MAK Makro?konomi
Teaching
Lectures: 2 hours per week throughout the semester.
Seminars: 2 hours per week through parts of the semester, (teacher and student lead), with exercises and student presentations.
There might occur weeks exempt from teaching
Examination
A 3-hour written school exam.
Examination support material
No examination support material is allowed.
Language of examination
The problem set will be given in English. Answers can be given in Norwegian, Swedish, Danish or in English. See § 5.4 in Regulations governing studies and examinations at the University of Oslo.
Grading scale
Grades are awarded on a scale from A to F, where A is the best grade and F is a fail. Read more about the grading system.
Explanations and appeals
Resit an examination
The Department of Economics has passed following resolution for ECON-courses: It will no longer be possible for candidates to register for an exam in a lower level course after having passed exams in intermediate and advanced level courses in the same subject area (also where there are no pre-requisites that apply to the intermediate course). Further information can be found here.
Students who might wish to retake the exam later, are not guaranteed that the course is ever repeated with a similar reading list, nor that the exam arrangement will be the same.
Withdrawal from an examination
It is possible to take the exam up to 3 times. If you withdraw from the exam after the deadline or during the exam, this will be counted as an examination attempt.
Special examination arrangements
Application form, deadline and requirements for special examination arrangements.
Evaluation
Feedback from our students is essential to us in our efforts to ensure and further improve the high quality of our programmes and courses. As a student at the University of Oslo you will therefore be asked to participate in various types of evaluation of our courses, facilities and services. All courses are subject to continuous evaluation. At regular intervals we also ask students on a particular course to participate in a more comprehensive, in-depth evaluation of this course, a so called "periodic evaluation".
A periodic evaluation of ECON4410 was conducted during autum term 2008. A Norwegian version of the evaluation report that was compiled on the basis of the information retrieved from the evaluation, can be found here
Other
As of Spring 2006 ECON4410/ECON3410 changed its name from International macroeconomics and finance into Introductory dynamic macroeconomics.
ECON4410 is the course number for registration for lecture, seminar and exam for the master students. ECON3410 – Introductory dynamic macroeconomics (discontinued) is the course number for the bachelor students.