Economist Abba Lerner is using MONIAC (Monetary National Income Analogue Computer) , a mechanical representation of the economy invented by A. W. Phillip (Bettmann/CORBIS).
Macroeconomics studies the functioning of a national or regional economy as a whole. While it is concerned with subjects that concern all citizens, such as unemployment, inflation, public debt, and financial crises, it is dealt with using abstract concepts and formal models. It also incorporates microeconomic concepts, regarding the behavior of consumers and firms on markets, while trying to show that the interactions between these many decisions produce effects that often exceed their sum. For all these reasons, this is a very complex area of study, where uncertainty reigns supreme.
The purpose of this class is to propose a mostly non-technical introduction to these matters. We will not expose entire mathematical models of the economy, the sort of which economists devise, but we will at least give a feel of these models, using abstract concepts as well as a mix of simple formula and graphical analysis in order to understand current economics issues. My goal is twofold: first, I want to understand how an economy works, why it dysfunctions at times and to what extent government can intervene to fix problems; second, I want the students to understand how macroeconomists think and conceive the world, why their conceptions sometimes stand in contrast to the perceptions of the actors who operate in the economy (business leaders, politicians, unionists and job seekers, for instance) and why they disagree with each other. While macroeconomics rarely reaches definitive conclusions about most current problems, it at least helps expose the terms of the debate.
Semester 1 will be concerned mostly with national issues, studying a closed economy in the short and the long run. Issues concerning economic growth (the economy in the very long run), the effects of international trade on the functioning of an economy and the goods and evils of financial markets will be addressed during the next semester.
Provisional program
- Introduction: the scope and limits of macroeconomics (1h30)
- The national product: its measure, where it comes from and where it goes (6h)
- Money and Inflation (3h)
- Economic Fluctuations in the long run and in the short run (6h)
- The long run (AS/AD model)
- The short run (IS/LM model)
- How macroeconomic policy operates: fiscal and monetary policies
References
Mankiw, N. Gregory, Macroeconomics (10th edition), Worth Publishers, 2019 (version française chez De Boeck Université).
YANN GIRAUD 