Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
12 January 2015
Macroeconomic Analysis, Spring 2015
Tutorial #1
1. Express the growth rate of y in terms of the growth rates of k; l, and m for the
following cases. Assume
is some arbitrary constant.
(a) y = k
(b) y = k=m
(c) y = k= (lm)
(d) y = (klm)
(e)
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
28 February 2015
Macroeconomic Analysis, Spring 2015
Tutorial #4  Answer Key
1. Consider the real business cycle model of perfect competition and clearing markets. Trace the eects of a temporary positive technology shock on the
economy (employment, outpu
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
25 January 2015
Macroeconomic Analysis, Spring 2015
Tutorial #1  Answer Key
1. Express the growth rate of y in terms of the growth rates of k; l, and
m for the following cases. Assume
is some arbitrary constant.
(a) y = k
(b) y = k=m
(c) y = k= (lm)
(d)
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Ioana Moldovan
Macroeconomic Analysis, Spring 2015
Lectures 45
I. Empirical applications of the Solow model
1. Model and the stylized facts
By considering the properties of the steadystate, we nd that:
X countries with higher average savings/investment
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Macroeconomic Analysis, Spring 2015
Lectures 12
Ioana R. Moldovan
University of Glasgow
Data/ Stylized Facts
Measures of economic development:
 income per capita (and its growth rate): GDP/population. A measure of welfare.
 income per worker (and its g
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Ioana Moldovan
Macroeconomic Analysis, Spring 2015
Lectures 67
1
Business Cycles  characteristics and measurement
See "Business Cycles  example" le
2
Model for the Short and MediumRun
The economic agents in this model economy are: households, rms, an
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Business Cycle Measurement
Outline
Characteristics of business cycles
business cycle elements
time series analysis: (re)visit some concepts
Analysis of some key macroeconomic variables
at business cycle frequency
Trend versus Cycle
To better understa
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Macroeconomic Analysis, Spring 2015
Lecture 3
Ioana R. Moldovan
University of Glasgow
The Solow Model with Exogenous Technological Progress
The rst setup of the Solow model (in lectures 1 & 2) did not include technological
progress. Implicitly, technology
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Ioana Moldovan
Macroeconomic Analysis, Spring 2015
Lectures 89
1
Monetary policy, in
ation and unemployment
1.1
The Phillips curve and in
ation inertia
Consider the equilibrium in the labor market. At equilibrium, the real wage is consistent
with what wo
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Proposal
Economics Dissertation 2015/16
Research Proposal
Title:
Moving towards a cashless society  The consequences of technological progress on
the economy: Evidence from the Swedish banking sector
Is a cashless society really that far away? The effec
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2017
Macroeconomic Analysis, Spring 2017
Tutorial #1
1. Express the growth rate of y in terms of the growth rates of k, l, and m
for the following cases. Assume that is some arbitrary constant.
(a) y = k :
(b) y = k=m:
(c) y = k= (lm) :
(d) y = (klm) :
(e) y =
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2017
Macroeconomic Analysis, Spring 2017
Tutorial #3
1. Explain the dierence between exogenous and endogenous technological
progress in the context of longrun growth. Why is this distinction important?
2. Read and discuss the following journal article (posted
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2017
Macroeconomic Analysis, Spring 2017
Tutorial #4
1. Real business cycle theory views business cycles as marketclearing, equilibrium phenomena with technology shocks being the main driving force.
To see this, consider our model of perfect competition and t
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2017
Macroeconomic Analysis, Spring 2017
Tutorial #5
1. Consider an economy with an inertial Phillips curve
t
=
t 1
+
(yt
ye ) ;
(1)
with = 1 and a central bank the sets optimally the nominal interest rate
to achieve an ination target, T , and keep output at i
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
15 March 2015
Macroeconomic Analysis, Spring 2015
Tutorial #5  Answer Key
1. Consider an economy with an inertial Phillips curve
with
=
1+
(y
ye )
= 1 and a Central Bank that optimally sets the interest rate to achieve
an in
ation target (
T)
and keep ou
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Macroeconomic Analysis, Spring 2015
Tutorial #2  Answer Key
1. The golden rule. Consider the steady state of the Solow model without
technological progress.
(a) Provide an expression for the steady state level of consumption per
worker, c . Explain how c
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Macroeconomic Analysis, Spring 2015
Tutorial #3 Answer Key
1. Explain the dierence between exogenous and endogenous technological progress in the context of longrun growth. Why is such distinction
important?
Exogenous means from
outsidethe model, it is
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Revision Notes on Economic
Growth
Solow Model
Steady State => a vantage point somewhere in the future to which an economy converges.
Exogenous Technical Progress: This is when output per worker is growing due to
technological progress, which allows techno
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
11 February 2015
Macroeconomic Analysis, Spring 2015
Tutorial #3
1. Explain the dierence between exogenous and endogenous technological progress
in the context of longrun growth. Why is such distinction important?
2. Read and discuss the following journa
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
26 January 2015
Macroeconomic Analysis, Spring 2015
Tutorial #2
1. The golden rule. Consider the steady state of the Solow model without technological progress.
(a) Provide an expression for the steady state level of consumption per worker, c .
Explain ho
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Lecture Notes on Business Cycles
Macroeconomic Variables of Interest
Aggregate Output (GDP = Y)
Consumption (C)
Investment (I)
Government Spending (G)
Correlation  the degree to which variables move together.
Serial Correlation  Correlation over tim
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Exam Question Answers
Answers
(i) A balanced growth path is a situation in which economic variables, such as output,
consumption, population, capital accumulation, etc, grow at constant rates.
In the case of the growth rate of capital per worker,
The depr
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Revision Notes on Economic
Growth (2)
Steady State and Consumption
Steady State => a vantage point somewhere in the future to
which an economy converges.
The further an economy is away from its steady state, the faster the level of growth is
(KA to KB).
I
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
25 January 2015
Macroeconomic Analysis, Spring 2015
Tutorial #1  Answer Key
1. Express the growth rate of y in terms of the growth rates of k; l, and
m for the following cases. Assume
is some arbitrary constant.
(a) y = k
(b) y = k=m
(c) y = k= (lm)
(d)
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Macroeconomic Analysis, Spring 2015
Tutorial #3 Answer Key
1. Explain the dierence between exogenous and endogenous technological progress in the context of longrun growth. Why is such distinction
important?
Exogenous means from
outsidethe model, it is
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
Macroeconomic Analysis, Spring 2015
Tutorial #2  Answer Key
1. The golden rule. Consider the steady state of the Solow model without
technological progress.
(a) Provide an expression for the steady state level of consumption per
worker, c . Explain how c
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
MACROECONOMIC ANALYSIS: INFLATION, UNEMPLOYMENT
AND GROWTH
COURSE CODE: ECON4019
CREDITS: 15
20142015
SEMESTER TWO
COURSE COORDINATOR AND LECTURER: IOANA MOLDOVAN
Course aims
The main aims of this course are:
To provide students with a thorough grounding
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
March 2014 Incourse Exam
Answers
(i)
The convergence hypothesis says that countries that are poorer tend to grow faster
and therefore should catch up with richer countries. Whereas in reality, this is not the
case.
In the longrun, output and capital gro
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
15 March 2015
Macroeconomic Analysis, Spring 2015
Tutorial #5
1. Consider an economy with an inertial Phillips curve
=
1
+
(y
ye ) with
= 1 and a Central Bank that optimally sets the interest rate to achieve an in
ation
target (
T)
and keep output at its
Macroeconomic Analysis: Inflation, Unemployment and Growth
ECON 4019

Spring 2015
28 February 2015
Macroeconomic Analysis, Spring 2015
Tutorial #4
1. Real business cycle theory views business cycles as marketclearing, equilibrium
phenomena and technology shocks as being the main driving force. To see this, consider
our model of perfec