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School of Social Sciences

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BAEcon Economics
Learn how the social sciences can help you to understand today's world.

BAEcon Economics

Year of entry: 2018

Course unit details:
Macroeconomics IIB

Unit code ECON20402
Credit rating 10
Unit level Level 2
Teaching period(s) Semester 2
Offered by Economics
Available as a free choice unit? Yes


See course Blackboard pages.


Unit title Unit code Requirement type Description
Macroeconomics IIA ECON20401 Pre-Requisite Compulsory
Co-requisite: ECON20401


The aims of this course are:

  1. To introduce students to macroeconomic theory and policy analysis at an intermediate level.
  2. To develop critical analysis and lay the foundation for macroeconomics courses in the final year.
  3. To provide the employability skills of describing macroeconomic events and key global issues to non-economists with confidence.

Learning outcomes

At the end of this course successful students should be able to demonstrate an understanding of:

  1. The main macroeconomic variables.
  2. The classical, Keynesian and alternative approaches to macroeconomic modelling.
  3. The IS-LM model for closed and open economies.
  4. The AS-AD model.
  5. Inflation, unemployment and the Phillips curve.



  • Key macroeconomic concepts and ‘stylized’ facts. Discussion of differing approaches to macroeconomic modelling.


Flexible Price (Classical) Macroeconomics:

  • The determination of aggregate output, employment and interest rates, and the effectiveness of macroeconomic policy, under the assumption of flexible prices.
  • A comparison of the classical and heterodox approaches to macroeconomic stabilization policy.


Sticky-Price (Keynesian) Macroeconomics:

  • The determination of aggregate output, employment and interest rates, and the effectiveness of macroeconomic policy, under the assumption of sticky prices.
  • Introduction to short-run economic fluctuations.
  • The IS-LM model; the AS-AD model.
  • Applying the IS-LM model to the financial crisis of 2008.


Open Economy Macroeconomics:

  • Nominal and real exchange rates and exchange rate regimes.
  • The Mundell-Fleming model and the effectiveness of macroeconomic policy under alternative nominal exchange rate regimes.
  • The pathology of currency wars and global imbalances.


Aggregate Supply and the Short-Run Trade-off Between Inflation and Unemployment:

  • Microfoundations of price and nominal wage stickiness.
  • The expectations-augmented Phillips curve and the natural rate of unemployment.

Teaching and learning methods

Lectures and tutorial classes.

Employability skills

Analytical skills
Problem solving

Assessment methods

Method Weight
Written exam 100%

Feedback methods

  • Past exam papers.
  • Tutorial feedback.
  • Office hours.
  • Revision sessions.
  • Discussion boards.

Recommended reading

Main text:

  • Mankiw (2009). Macroeconomics, 8th Edition, Worth Publishers, New York.

Supplementary Text:

  • Blanchard, Amighhini and Giavazzi (2010). Macroeconomics – A European Perspective, 1st Edition, Pearson Education.

Study hours

Scheduled activity hours
Assessment written exam 1.5
Lectures 22
Tutorials 5
Independent study hours
Independent study 71.5

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