-Introduction to macroeconomics.  Inflation, unemployment, the natural rate of unemployment, nominal and real GDP, business cycles, budget deficit and international debt.

-Measuring aggregate output and the price level. Circular flow of income; injections and leakages. Three alternative ways of measuring GDP. The accuracy in measured GDP. The CPI and the GDP deflator.
-Aggregate demand and aggregate supply. Short-run and long run aggregate supply. Shifts in aggregate demand and aggregate supply curves. Macroeconomic equilibrium.
-Aggregate expenditure decisions. Private consumption, private investment, government purchases of goods and services, net exports. Autonomous and induced expenditure.
-Equilibrium expenditure and output. The autonomous expenditure multiplier. Relationship between the aggregate expenditure and aggregate demand curves; derivation of the aggregate demand curve.
-Money and banking, Definitions and functions of money. The economic functions of financial intermediaries. How banks create money. The simple money multiplier. The Central Bank and open market operations. The money multiplier.
-Interest rate determination. The demand for money. Interest rates and bond prices. Money market equilibrium.

-Exchange rates and the balance of payments. The demand for and supply of foreign exchange. Exchange rate regimes. The balance of payments (BOP) account. BOP equilibrium.
-Aggregate demand fluctuation. Monetary and fiscal policy transmission mechanisms. Time lags. Crowding out, international crowding out. Relative effectiveness of monetary and fiscal policy.
-The labour market and aggregate supply. The flexible wage theory. The sticky wage theory. The long-run and short-run aggregate supply curves.
-Expectations and inflation. Anticipated and unanticipated inflation. Costs of inflation. Demand- pull and cost-push inflation. Adaptive expectations, rational expectations and their policy implications. The short-run and long-run Phillips curves. Hysteresis stabilizing the economy: Macroeconomic policy targets and instruments. Conflicts between objectives. Fixed rules vs. feedback rules.
-Government budget deficit. Sources of the deficit. The deficit and the business cycle. The real deficit. Debt-financing vs. money financing. Possible impact of the deficit on future generations.

  1. Parkin, M.,  Macroeconomics. Addison-Wesley, 1990/ latest edition.
  2. Samuelson, P.A. and Nordhaus, W D., Economic,18th edition, Irwin/McGraw-Hill, 2004.