This course provides a sweep through the content of the first-year Macroeconomics course. The first part introduces the foundations of short-term macroeconomic analysis, using a formalised approach in a static analysis framework. The second part reviews the main economic theories explaining fluctuations of consumption and investment, the two principal components of internal demand. Particular attention will be given to the light shed by these theories on two concrete cases taken from recent economic history: consumption and the financial bubble in the USA, investment and the new economy, credit crunch and the weakening of the Japanese economy in the 1990s.
- Production and distribution of national revenue
- Economic growth
- Fluctuations and stabilisation policies
- The dynamics of inflation and unemployment
- Theory of consumption –Life cycle model. Revenue and asset price uncertainty. Liquidity constraints.
- Investment theory –User cost of capital. Adjustment costs and Tobin’sq. Uncertainty and irreversibility. Imperfections in the credit market.
Blanchard, O., et D. Cohen (2008), Macroéconomie, Pearson.