Macroeconomic Theory module (BU41021)

Learn a variety of business cycle models to understand how changes in demand and supply can cause fluctuations in output and prices.

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Module code


Understanding how changes in demand and supply impact output and prices is one of the key theories of Macroeconomics.

In this module you will learn a variety of business cycle models used in the modern macroeconomic framework to better understand the world we live in and the importance of macroeconomics.

What you will learn

In this module, you will:

  • study the dynamic Keynesian IS-LM model using the Frisch-Slutsky paradigm
  • compare it with the real business cycle model
  • examine the new Keynesian DSGE model

By the end of this module, you will be able to:

  • understand the main modern macroeconomic theoretical developments
  • apply analytical methods in macroeconomics
  • apply macroeconomic principles and reasoning to a variety of applied topics and policy designs
  • specify and quantify economic relationships and evaluate outcomes
  • use the economic concepts/theoretical models to structure and analyse the economic debates in a logical manner
  • solve economic problems using macroeconomic analysis

Assignments / assessment

The module is assessed by 2 take-home tests (each of 50% weight).

Teaching methods / timetable

The module will consist of lecture-style delivery of core material. Learning material is provided through lecture notes, reading materials, and videos.

The module consists of 7 two-hour lectures:

Week Topic
1 Business Cycles
2 The Keynesian AS-AD model (I) 
3 The Keynesian AS-AD model (II)
4 The Keynesian AS-AD model (III)
5 Real business cycle model
6 New Keynesian DSGE model (I)
7 New Keynesian DSGE model (I)



This module is available on following courses: