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Introduction to Macroeconomics Gavin Cameron University of Oxford OUBEP 2006.

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Presentation on theme: "Introduction to Macroeconomics Gavin Cameron University of Oxford OUBEP 2006."— Presentation transcript:

1 Introduction to Macroeconomics Gavin Cameron University of Oxford OUBEP 2006

2 OXFORD UNIVERSITY BUSINESS ECONOMICS PROGRAMME2 introduction “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!

3 OXFORD UNIVERSITY BUSINESS ECONOMICS PROGRAMME3 five days of macro… 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

4 OXFORD UNIVERSITY BUSINESS ECONOMICS PROGRAMME4 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?


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