EC489Lecture1 - EC489.01 Special Topics in Economics...

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EC489.01 Special Topics in Economics: Macroeconomics
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Some information For all communication: [email protected] Class Hours: 14.00-17.00 Class Days: 19, 20, 25, 27 July; 1,2,3,4 August Office: NB217 Quizzes (15%), problem sets (15%) and a final exam (70%) on August 8 th
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Outline Part I: Review of Intermediate Macroeconomics Classical Theory (Today) Growth Theory (Wednesday) usiness Cycle Theory (Next week) Business Cycle Theory (Next week) Part II: Introduction to Advanced Macroeconomics (Last week) Mathematical tools for macro Deterministic dynamic programming
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What is macroeconomics? What are the key issues in macroeconomics? Real GDP Inflation Unemployment Macroeconomic modeling and data
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Classical Theory: The economy in the LR National income accounting (Ch. 3) Money and inflation (Ch. 4) Unemployment (Ch. 6)
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A Model of National Income A roadmap through assumptions No role for money (Ch. 4) Closed economy (throughout) ll employment (Ch. 6) Full employment (Ch. 6) Flexible prices (Ch. 9 – 13)
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Total production of goods and services Production function [Y =F(K,L)] Constant returns to scale [ z Y=F( z K, z L)] The supply
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production Neoclassical theory of distribution Prices adjust to balance supply and demand Demand depends on marginal productivity Factor prices Competitive firm maximizing profits: Profit=PY-WL-RK MPL, MPK and diminishing marginal product Economic profit
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EC489Lecture1 - EC489.01 Special Topics in Economics...

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