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Macroeconomics Analysis

Course developer

Prior knowledge

Ekon5090, Microeconomics Analysis

Ekon5139, Economic Resources

Replaced course

EkonM008 [GEKOM008] Macroeconomics Analysis

Course abstract

The topics of the course give an in-depth knowledge of the theoretical principles of a market economy and causal relationships at the macro-level, creating an understanding of how to apply them at various stages of an economic cycle. The course particularly focuses on detailed analyses of macroeconomic models, long-term growth preconditions and prerequisites and the most important macroeconomic policies. After completing the course, students can independently, critically and prudently analyse the key indicators of the national economy of Latvia and economic trends in European and other countries.

Learning outcomes and their assessment

KNOWLEDGE
1. Students will be able to: demonstrate a profound knowledge of macroeconomic models and relationships; test
2. Demonstrate a profound knowledge of preconditions and prerequisites for long-term growth and the macroeconomic policies contributing to it; test
3. Demonstrate a reasonable understanding of the specifics of application of macroeconomic policy instruments at various economic cycle stages and in various European and world countries, which is a basis for creative thinking and research; independent work, a presentation
SKILLS
4. Independently identify and use the legal framework and instruments of macroeconomic regulation, substantiate an alternative to solving a particular macroeconomic problem; independent work, a presentation
5. Reasonably explain and discuss urgent economic problems based on macroeconomic conceptions and indicators; a presentation, discussions in seminar classes
6. Do research and, based on problem-solving skills, justify the government’s macroeconomic functions and the behavioural patterns of economic entities in unexpected situations and under exceptional circumstances; independent work
7. Engage in group work and assume responsibility for the results and an analysis of the group work; Group work
8. Develop social interaction, cooperation and organisational skills needed for employment; discussions in seminar classes
COMPETENCE
9. Independently formulate and critically analyse complicated and dynamic macroeconomic relationships and challenges at the national and global levels and to integrate the knowledge of macroeconomics and other sciences; tests
10. Theoretically and empirically substantiate and assess national economic policies aimed at maintaining macroeconomic equilibrium and the effects of it on the environment and the society; tests, independent work, seminar classes.

Course Content(Calendar)

1. Macroeconomic models, their nature, functions, historical aspects and role in economic analyses (2 h lectures, 1 h practical);
2. Macroeconomic equilibrium models of J.M. Keynes and Harrod and Domar and equilibrium conditions ( 2 h lectures, 2 h practicals);
3. IS-LM model and factors causing changes in equilibrium. Investment policy and the effectiveness of the policy in the national economy of Latvia ( 2 h lectures, 2 h practicals);
4. IS-LM-BP model. Macroeconomic analysis of foreign trade. The balance of payments. Change in the exports of Latvia and measures for boosting the exports (2 h lectures, 2 h practicals);
5. Mundell-Fleming model. Exchange rate problems. Assessment of meeting the Maastricht criteria and the introduction of the euro in Latvia (2 h lectures, 1 h practical);
6. 1st test Macroeconomic models and relationships (1 h practical);
7. Economic growth and the evolution of growth theories. Factors and analysis of economic growth in Latvia. The cyclical nature of economic development, the basic problems and solutions ( 2 lectures, 2 h practicals);
8. Inflation and employment. Employment and unemployment problems in Latvia, the EU and the world. Modern conceptions of inflation. Relationships between inflation and employment ( 2 h lectures, 2 h practicals);
9. Fiscal policy analysis. Basic problems of fiscal policy and the ways of improving it ( 2 h lectures, 2 h practicals);
10. Long-term development strategy of Latvia, its analysis. Social progress indicators and economic development forecasting. Changes in social progress in Latvia, the EU and the world (2 h lectures, 2 h practicals);

11. 2nd test Long-term preconditions and prerequisites for economic growth and macroeconomic policies affecting the growth (1 h practical).

Requirements for awarding credit points

A written examination covering all the topics studied during the course has to be passed. The final mark consists of the following pieces of evaluation: a test on theory and a test on basic macroeconomic indicators, processes and relationships in the comparative, content and historical aspects, as well as independent work and a presentation.

Description of the organization and tasks of students’ independent work

The student has to electronically submit one completed independent assignment, 7-10 pages in length, within the specified time, on the topic “Specifics of the application of macroeconomic policy tools at different stages of the economic cycle and in different European and world countries”. Each student, if possible, according to their specialisation chosen, independently prepare and present (10-12 slides) a report “The latest economic trends and their factors in Latvia, the EU and world countries” during seminar classes.

Criteria for Evaluating Learning Outcomes

The final evaluation consists of a written examination (40%) on all the topics, two tests (40%) on the topics “Macroeconomic models and relationships” and “Long-term preconditions and prerequisites for economic growth and macroeconomic policies affecting the growth”, an independent assignment (10%) and a presentation (10%). 10% are equal to one point on a 10-point marking scale.

Compulsory reading

1. Bikse V. Makroekonomika: teorija un politika. LiePA, 2015, 269 lpp.
2. King, David N. Economics. New York : Oxford University Press, 2012, 676 p.
3. Mankiw G.N., Taylor M.P. Macroeconomics. 7th ed., Worth Publishers, 2010, 608 p.
4. McConnell, Campbell R. Macroeconomics: principles, problems, and policies. New York: McGraw-Hill/Irwin, 2012. 499, 37 lpp.
5.Šenfelde M. Makroekonomika. 4. izd. Rīga: RTU, 2012, 244 lpp.

6. Williamson S.D. Macroeconomics. Global Edition. Sixth Edition UK: Pearson Education Limited, 2018, 731 p.

Further reading

1. Ducmane K., Ozoliņa A. Naudas laiki Latvijā. A/S Latvijas avīze, 2013, 250 lpp.
2. Latvijas ekonomikas un uzņēmējdarbības izaicinājumi. A. Saukas un B. Rivžas zinātn.red. Ventspils Augstskola, 2014, 227 lpp.
3. Rifkins Dž. Jaunās ekonomikas laikmets. Rīga: Jumava, 2004, 280 lpp.
4. Snowdon B., Vane M.R. Modern Macroeconomics. Edward Elgar Publishing Limited, 2005, 816 p.

5. Sordet, Bernard. Iespējamā Eiropa /Bernard Sordet ; no franču valodas tulkojusi Kristīne Našeniece. Rīga: Mansards, 2014, 213 lpp.

Periodicals and other sources

1 .Dienas bizness: nedēļas laikraksts: Latvijas biznesa avīze. Rīga: Diena: Dagens Industri, 2005-. ISSN 1407-2041.
2. Kapitāls: žurnāls lietišķiem cilvēkiem: krāsains biznesa un ekonomikas žurnāls. Rīga: Lietišķās informācijas dienests. ISSN 1407-2505.
3. The Economist: London: Economist Newspaper Ltd. ISSN 0013-0613. Pieejams arī: http://www.economist.com/?sa_campaign=econsubs/europe/subspage/imglink
4. Latvijas tautsaimniecība: makroekonomiskais apskats: LR Ekonomikas ministrijas izdevums. Pieejams: https://www.em.gov.lv/lv/nozares_politika/tautsaimniecibas_attistiba/latvijas_ tautsaimnieciba__makroekonomiskais_apskats/
5. Latvijas Statistikas gadagrāmata: LR Centrālās statistikas pārvaldes izdevums. Pieejams: http://www.csb.gov.lv/dati/e-publikacijas/latvijas-statistikas-gadagramata-2017-45759.html
6. Centrālā statistikas pārvaldes mājas lapa. Pieejams: www.csb.gov.lv;
7.Eurostat mājas lapa. Pieejams: http://epp.eurostat.ec.europa.eu;
8. Latvijas Bankas mājas lapa. Pieejams: www.bank.lv;
8. Ministru kabineta mājas lapa. Pieejams: www.mk.gov.lv;
9. Ekonomikas ministrijas mājas lapa. Pieejams: www.em.gov.lv;
10.Finanšu ministrijas mājas lapa. Pieejams: www.fm.gov.lv;

11. Vides aizsardzības un reģionālās attīstības mājas lapa. Pieejams: www.varam.gov.lv u.c.

Notes

Compulsory course for the ESAF academic Master programme Economics