Module Convenor: Prof Gino Gancia
This module deals with the long-run growth of GDP and its short-run fluctuations. You will start by analysing the traditional models of economic growth theory, i.e. the Solow-Swan model and the Ramsey-Cass-Koopmans model. Within the framework of these models you will study the central questions of growth theory as well as the effects of government expenditure on macroeconomic variables. You will then discuss the most important ideas of endogenous growth theory, including research and development, human capital formation, and knowledge creation. The second part of the module deals with two classes of theories of aggregate fluctuations, i.e., real-business-cycle theories and Keynesian theories. Whereas real-business-cycle theories assume flexible prices and market clearing, Keynesian theories proceed from the assumption of nominal stickiness and market failure. We discuss possible reasons why prices and wages are sticky and analyse the implications of this fact.
Assessment: 80.0% Examination, 20.0% Coursework