Macroeconomic Concepts and Issues Professor Dermot McAleese and Alan Matthews MSc EPS Hilary Term 2011

Module Statement  Introduction to best practice macroeconomics  Focuses on issues and concepts of practical relevance  Explains changes in global economic environment  Analyses implications for policy

Course Outline 1. The Economic Policy Framework for the 21 st century (DMcA 1) 2. Gross Domestic Product (GDP) and Business Fluctuations (DMcA 11,16) 3. What Makes Nations Grow? (DMcA 2) 4. Stabilising the Economy: Central Banks and Monetary Policy (DMcA 12, 13) 5. Fiscal Policy, Budget Deficits and Public Debt (DMcA 14, 15) 6. Trade and protectionism (AM 17) 7. Competitiveness in a global economy: productivity, exchange rates and prices (AM 21) 8. EU economic policy issues: shaping the EU budget (AM 9) 9. EU economic policy issues: Climate change policies (AM 21) 10. Contemporary challenges for the global economy: overview and summary (AM 20)

Reading  Economics for Business Dermot McAleese 3rd Edition Financial Times/Prentice Hall 2004  Additional Readings (e.g. reports by OECD, IMF etc) Supplementary tables

ASSESSMENT Assessment will consist of a final end of year examination (70% of overall mark) and term project (30% of overall mark). The final examination will be a three-hour test, 8 questions answer 4. Details of the term project will be provided in class. The project should be submitted not later than the end of the 8th week of the module.

OBJECTIVES  To provide understanding of the market system  To develop a critical analysis of current economic policies  To enable participants to contribute to the debate about economic issues

Who is Dermot McAleese? Chair, Institute for International Integration Studies Lectures in Dublin, Paris, Casablanca, Shanghai Executive courses, Irish Management Institute Economic consultant to government and business Pro Chancellor, Trinity College Dublin

Recent events “The teachers now have some problems.” Wang Qishan, China’s Vice Premier to his American counterparts at Sino America summit in October 2008.

IMF economic forecasts Review (updated data to be circulated in class)

Downside risks flagged in 2006/7 IMF reports Oil and energy prices External imbalances Financial fragility (hedge funds) Higher interest rates and the housing market

IMF forecasts for world output 2009 Date of forecast Jul % Oct 083.0% Nov 082.2% Jan 090.5% Apr % July % Oct % % for 2010 Oct % ……. 4.8% for 2010 …………. 2.5% for 2010

Oct 2010

Source: IMF World Economic Outlook Oct 2010

Class Exercise (15 minutes) Write down four questions on economics that you would like to have answered by this module