Intermediate Macroeconomics 2

Module code: EC2032

Module co-ordinator: Professor Panicos Demetriades

In this module you will study modern macroeconomic analysis and policy making with an emphasis on the commercial environment. This will help you to analyse critically the implications of international macroeconomic issues for business and financial decision-making.

Topics covered

  • Main determinants of money demand and money supply.
  • Determination of the nominal and real interest rates.
  • UK monetary policy: main transmission mechanisms; implications for commercial activities.
  • Theories of inflation.
  • Major costs, to individual businesses and to the whole economy, associated with different forms of inflation.
  • he output-inflation trade-off; the role of inflationary expectations and different policy options in determining the speed and costs of adjustment.
  • Time inconsistency and how policy credibility may provide a solution.
  • Independence of central banks and the associated economic outcomes to business and society.
  • Links between financial markets, the business environment and international macroeconomic activity.
  • Causes and consequences of stock market crashes.
  • The role of financial development in promoting international economic growth.
  • Main determinants of business investment.
  • Impact of macroeconomic policy on investment decisions.
  • Impact of aggregate investment on the business cycle.
  • The link between budget deficits and government debt over time.
  • How consumer behaviour affects the impact of government debt on the economy.
  • Macroeconomic policy issues around budget deficits and the level of government debt; why these are importance to business.


  • 20 one-hour lectures
  • 9 one-hour tutorials


  • Exam, 90 minutes (100%)