Development Macroeconomics

MGDI30272 Development Macroeconomics 20 Semester 2 Undergraduate Level 3 Adam Aboobaker Unit coordinator 1 FHEQ level (Framework for Higher Education Qualifications) ' Middle part of Bachelors ' European Credit Transfer & Accumulation System Rating : 10.0 Macroeconomics concerns the functioning of the economy as a whole. Usually “the economy” is understood as that of a nation state, but ideas in macroeconomics can also be applied to smaller units (for example, an Indian state) or to larger ones (for example, the West African Economic and Monetary Union). There is also a macroeconomic element to the study of economic connections between nation states. Many macroeconomic concepts are applicable both to the Global North and to the Global South, but this course unit focuses on the application of these concepts to the South.  Macroeconomics concerns the functioning of the economy as a whole. Usually “the economy” is understood as that of a nation state, but ideas in macroeconomics can also be applied to smaller units (for example, an Indian state) or to larger ones (for example, the West African Economic and Monetary Union). There is also a macroeconomic element to the study of economic connections between nation states. Many macroeconomic concepts are applicable both to the Global North and to the Global South, but this course unit focuses on the application of these concepts to the South. There are two main components to the course, as described below.Long-run economic growth (weeks 1-5). In this section of the course, we first review theories of growth covered in the first-year History of Thought and Interdisciplinary Perspectives course units, based on the contributions of Adam Smith, Arthur Lewis, and Robert Solow. We then look at recent developments of these theories, along with empirical evidence on the main determinants of long-run growth. These developments include contributions by political scientists on the importance of formal and informal institutions in creating the conditions for growth. We also look at the potential role of foreign aid.Short-run macroeconomic stability (weeks 6-10). In this section of the course, we look at factors affecting economic volatility. We begin by developing a macroeconomic model designed to explain short-run variation in output, employment and prices, and then apply this model to macroeconomic data from countries in the Global South. We then look at the implications of this theory and evidence for monetary, fiscal and exchange rate policy. The unit aims to provide students with a grounding in macroeconomic theory and its application to developing countries, equipping them to combine theory and data to analyse macroeconomic policy questions. <ul> <li>Distinguish between different theories of long-run economic growth</li> <li>Describe how economic theory can be used to explain variation in output, employment and prices</li></ul> <ul> <li>Evaluate the predictions of a macroeconomic model using appropriate data sources</li> <li>Compare the characteristics of different macroeconomic models</li> <li>Critically analyse macroeconomic policy choices using appropriate theory and data</li></ul> Find, interpret and correctly reference published researchPresent and analyse alternative arguments involving theory and evidenceManage datasets using Excel and 'R' <ul> <li>Develop a critical and analytical argument, making use of appropriate evidence</li> <li>Communicate ideas in writing in a form appropriate for the academic community and the policy-making community</li></ul> Week 1: Economic growth in the theory of Smith and LewisWeek 2: The Neoclassical growth modelWeek 3: Some things missing from the Neoclassical modelWeek 4: Evidence on the determinants of economic growthWeek 5: Analysing growth policiesWeek 6: An integrated short-run model of output, employment, prices and exchange rates (1)Week 7: Guest Lecture Week 8: Non-Neoclassical theories of growth (1) Week 9: Non-Neoclassical theories of growth (2)Week 10: Macroeconomic stabilization policy – theory and evidence (1) Teaching and learning will be based on lectures (twice per week) and tutorials (once per week). Lectures will combine presentation of the learning material with some interactive discussion. Reading lists, lecture slides and tutorial questions will be posted on Blackboard. Tutorials will provide students with the opportunity to engage critically with the learning material through group discussions and presentations. Advice on how to prepare for each tutorial will be posted on Blackboard. 0 Other 50% 1 Written exam 50% First draft of a written assignment based on analysis of a macro-economic dataset (minus Introduction and Conclusion) (1,000 words) (Formative)(Students will revise their draft assignments for summative assessment.)<ul> <li>Second draft of a written assignment based on analysis of a macroeconomic dataset. (1,500 words) (50%)</li></ul>  Written comments via Blackboard. MGDI20261 Development Microeconomics Co-Requisite Compulsory Y Pierre-Richard Agénor and Peter J. Montiel (2015) Development Macroeconomics (4th edition), Princeton University Press: Princeton, NJ.Nancy Birdsall (1988) "Economic approaches to population growth," Handbook of Development Economics 1: 477-542.W. Arthur Lewis (2007) The Theory of Economic Growth, Routledge: London, UK.Gérard Roland (2016) Development Economics, Routledge: London, UK.Eduardo Levy Yeyati and Federico Sturzenegger (2010) “Monetary and exchange rate policies,” Handbook of Development Economics 5: 4215-4281. Lectures 20 Tutorials 10 0 170