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Introduction to Macroeconomics

Introduction to Macroeconomics. Gavin Cameron University of Oxford. OUBEP 2006. “Macroeconomics? Is that the one about the big things?” Macro helps you to: Read the FT Understand Ben Bernanke Think about China Understand your business environment Avoid country crises!. introduction.

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Introduction to Macroeconomics

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  1. Introduction to Macroeconomics Gavin Cameron University of Oxford OUBEP 2006

  2. “Macroeconomics? Is that the one about the big things?” Macro helps you to: Read the FT Understand Ben Bernanke Think about China Understand your business environment Avoid country crises! introduction OXFORD UNIVERSITY BUSINESS ECONOMICS PROGRAMME

  3. Sunday (Introduction and the Long Run) Around the World in 60 Minutes Economic Growth Unemployment Monday (the Short Run) Short-run macroeconomic activity Short-run policy implication Unemployment and Inflation Guest Speaker: Jon Temple on Globalisation & Growth Tuesday (the Medium Run) The Open Economy Balance in the Open Economy Modern Macroeconomic Practice Guest Speaker: Linda Yueh on China Wednesday (International Issues) Free Trade Trade Barriers Oil Guest Speaker: Nick Crafts on the BRIC economies Thursday The Macro Project Day with OEF (green team to win!) Guest Tutor: Adrian Cooper five days of macro… OXFORD UNIVERSITY BUSINESS ECONOMICS PROGRAMME

  4. syndicate modelling task • In the land of Courytania, E=C+I+G+X-M and C=cYD where YD is disposable income (equal to Y at first). • Solving the model (E*=Y) • What is equilibrium income when I=20, G=10, X=50, M=50 and c=0.9? • What is the marginal propensity to consume? Plot a diagram relating E to Y. • What happens to income if I=30? What is the multiplier? • Taxing the citizens • What happens to equilibrium income if the government introduces a tax at rate t=0.1, so YD=Y-tY? • Paying the moneylenders • What happens to equilibrium income if I=20-10r where r=0.1, 0.05 and 0 respectively? Plot a diagram relating r and Y. • Importing • What happens to equilibrium income if M=20+0.1YD? OXFORD UNIVERSITY BUSINESS ECONOMICS PROGRAMME

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