Open-economy Macroeconomics

Victoria University of Wellington

Course Description

  • Course Name

    Open-economy Macroeconomics

  • Host University

    Victoria University of Wellington

  • Location

    Wellington, New Zealand

  • Area of Study

    Economics, Finance

  • Language Level

    Taught In English

  • Prerequisites

    ECON 141 or 140

  • Course Level Recommendations

    Upper

    ISA offers course level recommendations in an effort to facilitate the determination of course levels by credential evaluators.We advice each institution to have their own credentials evaluator make the final decision regrading course levels.

    Hours & Credits

  • Credit Points

    15
  • Recommended U.S. Semester Credits
    3 - 4
  • Recommended U.S. Quarter Units
    4 - 6
  • Overview

    Description
    Applications of an open economy macroeconomic model to macroeconomic issues and policy, including the interdependence of macroeconomic activity and markets, the roles of expectations variables and other dynamic adjustment mechanisms, the significance of international events, exchange rate regimes, inflation, unemployment.

    ECON202 is an intermediate level open-economy macroeconomics course, which provides a more detailed consideration of some of the macroeconomic topics introduced in ECON140, together with additional material and perspectives. It features applications of an open economy macroeconomic model to macroeconomic issues and policy, including the interdependence of macroeconomic activity and markets, the roles of expectations variables and other dynamic adjustment mechanisms, and the significance of international events, exchange rate regimes, inflation, and unemployment. More detailed analyses of these and other dynamic issues are taken up in ECON305.

    Course Learning Objectives
    By the end of this course, students should be able to:
    1. describe the interdependent nature of key macroeconomic variables and markets, and the dynamics of responses to economic shocks
    2. analyse goods and financial market behaviour in the basic IS-LM model
    3. explain the role of expectations variables in financial and goods markets
    4. analyse how open economy financial and goods markets operate under fixed and flexible exchange rate regimes
    5. analyse the supply side of a macro-economy: the labour market, wage setting and price determination, natural rates of unemployment
    6. analyse the open-economy AD-AS model with natural output levels, and use it to explain the dynamics of responses to demand-side and supply-side shocks
    7. explain modern open economy Phillips curves, inflation and unemployment tradeoffs, natural/potential economic growth rates, and their variations over time
    8. assess the pros and cons of alternative exchange rate regimes, and explain how they provide different adjustment mechanisms for domestic and external economic shocks
    9. analyse monetary and fiscal policies, and explain the conditions under which they should and should not be used

    Assessment
    Tutorial Assignments 15%
    Mid-course Test 15%
    Final Exam (2 hours) 70%

Course Disclaimer

Courses and course hours of instruction are subject to change.

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Please note that some courses with locals have recommended prerequisite courses. It is the student's responsibility to consult any recommended prerequisites prior to enrolling in their course.