Macroeconomics. Macroeconomics is the branch of the economics that you will most often hear about in the news, whether it is the latest decision on interest rates by the federal reserve or new data on GDP growth in China. Many macroeconomic questions being at the center of public debate in recent years, especially since the 2007, 2008 financial crisis. For example, how can monetary policy support the economy and avoid deflation when interest rates reach zero? Can quantitative easing be used instead? Or does a policy sometimes described as printing money, create too many risks of high inflation in the future?
In the eurozone, how can those countries that have experienced high unemployment return to growth, now that they share a common currency, and there are no exchange rates within the eurozone that can adjust? The poor economic performance of many western economies in the years after the financial crisis can also be seen in contrast to fast-growing economies elsewhere in the world, most prominently China. At current rates of GDP growth, many wonder how long it will be before China catches up with the west, and how this will reshape the world economy. Can we really expect the Chinese economy to continue to grow at the remarkable pace seen in the last few decades? More generally, what are the sources of economic growth and the differences in living standards across countries? Why do some countries succeed while others fail? Can we expect rises in living standards to be sustained in the future?
The aim of this course is to the help you understand what lies behind macroeconomics you hear about in the news and in public debates. By taking this course, you will develop a deeper understanding of macroeconomics that allow you to think about and analyze the issues for yourself. You'll be better informed about the big macroeconomic questions, and challenges, and better able to contribute to public debate yourself. In studying macroeconomics, it's necessary to understand how the economy fits together as a system, how the different parts are related. This is quite different from microeconomics where individual households, firms, and markets are studied in isolation.
In macroeconomics, you must account for one person's spending being another person's income. One person's debt being another person's savings [c.f., Modern Monetary Theory]. The economy, as a whole, is a complicated thing and our challenge will be to overcome the complexity by learning to use some economic models to guide our thinking. By the end of the course, I hope you will agree this is both intellectually interesting and helps to shed light on the important issues mentioned. Good luck with your future studies.