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Unit information: Economic Principles 2 in 2019/20

Please note: It is possible that the information shown for future academic years may change due to developments in the relevant academic field. Optional unit availability varies depending on both staffing and student choice.

Unit name Economic Principles 2
Unit code EFIM10007
Credit points 20
Level of study C/4
Teaching block(s) Teaching Block 2 (weeks 13 - 24)
Unit director Dr. Katerina Raoukka
Open unit status Not open

EFIM10010 Economic Principles 1



School/department School of Economics, Finance and Management
Faculty Faculty of Social Sciences and Law


This unit follows on from Economic Principles 1 and develops economic theories and ideas at a more rigorous level. The unit examines case studies and uses economic models to understand the behaviour of different macroeconomic variables. The unit also covers general equilibrium theory, the second best welfare theorem, international trade and oligopoly models.

The key aim is to introduce the student to a wide range of models which are useful in economic analysis of consumers, firms and policy-makers. Another key aim is to introduce the student to a dynamic 3-equation model of the whole economy and equip them with the tools to use that model to understand and interpret macroeconomic events.

Intended learning outcomes

Students will be able to:

1. Appreciate the interrelatedness of key economic variables and to analyse these interrelationships using simple general equilibrium models

Assess and judge the welfare consequences of various policies and market configurations.

2. Understand the basic principle of comparative advantage.

3. Explain important concepts such as the output gap, the Phillips curve and the monetary policy rule.

4. Analyse the behaviour of the output gap, the interest rate and the rate of inflation using a simple 3-equation model of an economy that is disturbed by various shocks, some of which will have originated abroad.

5. Recognise the complexity of policy making in a highly uncertain environment and with an imperfect knowledge of the way key macroeconomic variables interact and are determined over time.

6. Analyse the causes and consequences of the financial crises and debt crises using relevant case studies.

Teaching details

36 hours of lectures

9 hours of classes

Assessment Details

Summative Assessment:

2.5 hour examination in worth 100% at the end of the relevant teaching block. This tests all the learning outcomes.

Formative Assessment:

Students will complete 4 pieces of formative assessment during the unit each consisting of a short (1000-word) essay and a few analytical questions. All the learning outcomes will be assessed.

Reading and References

Jones, Charles I. Macroeconomics, 2nd ed.

Burda and Wyplosz, 6th ed. Macroeconomics

Gottfries, 2013, Macroeconomics

Blanchard, Amighini and Giavazzi. Macroeconomics: A European Perspective, 2nd ed.

Varian, Hall. Intermediate Microeconomics, a Modern Approach

Perloff, Jeffrey. Microeconomics with calculus