Intermediate Macroeconomics 1

Module code: EC2024
Module co-ordinator: Dr Richard Suen

Macroeconomics is the branch of economics that concentrates on the behaviour of the economy as a whole (aggregate consumption, total production, aggregate employment) and evaluates its overall performance in terms of inflation, the growth rate of per capita GDP, and unemployment. In this module you will explore theoretical frameworks for the study of short- and medium-term macroeconomic phenomena, using the basic tools of short- and medium-term macroeconomic analysis.

We will focus on short-term macroeconomic phenomena, such as fluctuations in production, employment rates and prices (these are commonly known as business cycles) and identify the forces that drive short-term movements in macroeconomic variables.

Such knowledge is important because it lets us analyse, discuss and compare different macroeconomic policies, evaluating their effectiveness in achieving desirable macroeconomic objectives. Policy-relevant questions that can be addressed with macroeconomic analysis include:

  • What policy should we adopt in order to counteract the reduction of per capita output from $43,000 to $40,000 which resulted from a temporary negative shock (e.g. a sudden increase in oil prices)?
  • Which is the appropriate policy to counteract the effects of an increase in unemployment from 7% to 8.5% during a recession?
  • How can we combat increasing inflation, which resulted from a positive demand shock (i.e. a sudden increase in stock prices)?
  • Under what circumstances are different types of macroeconomic policy (fiscal or monetary) more effective? 
  • What is the impact of macroeconomic policy on exchange rates and the trade balance?

Topics covered

  • Macroeconomics of the goods, financial, and labour markets
  • Aggregate demand, aggregate supply and the forces that determine production, unemployment and inflation
  • Economic policy: fiscal and monetary policies and their effects on the economy
  • Macroeconomics in an open economy: exchange rates and trade


  • 20 one-hour lectures
  • 9 one-hour seminars


  • Mid-term test (25%)
  • Written assignment (75%)