Macroeconomic Policy in Practice module (BU42020)

Learn to use macroeconomic principles to design, guide and interpret various aspects of macroeconomic policies within a contemporary context.

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Macroeconomic policy refers to government actions aimed at managing a country's economy as a whole. It involves fiscal policies, such as taxation and government spending, and monetary policies. These control the money supply and interest rates.

Such measures are used to stabilise inflation, promote economic growth, reduce unemployment, and maintain overall economic stability. By influencing aggregate demand and supply, macroeconomic policy seeks to create favourable conditions for sustainable economic development and enhance the overall well-being of a nation's population.

In this module you will consider using macroeconomic principles to design, guide, and interpret various aspects of macroeconomic policies within a contemporary context.

What you will study

In this module you will:

  • learn macroeconomic policy from the perspective of macroeconomic principles
  • understand how the political process interacts with macroeconomic theory and policy in practice
  • review the evolution of monetary policy operations
  • analyse the contemporary operation of monetary policy
  • learn theories explaining how policymakers determine fiscal policy
  • understand the practical issues of setting fiscal policy
  • relate monetary and fiscal policies to the empirical experience of modern economies

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

  • understand the role of government and central banks in the regulation of the economy at the macroeconomic level
  • apply core macroeconomic theory and models in the empirical analysis of economic issues
  • frame macroeconomic problems within their broader social, political, and historical context
  • employ key economic concepts to structure policy issues in a variety of regulatory contexts
  • conceptualise policy problems in a tractable form for macroeconomic analysis
  • critically review and synthesise published work on a range of economic policy issues

Assignments / assessment

The module is assessed by 2 essays

  • monetary policy (50%)
  • fiscal policy (50%)

This module does not have a final exam.

Teaching methods / timetable

The module is built around two components: monetary policy and fiscal policy.

The core material for this module will be delivered through lectures. Learning material is provided through lecture notes, reading materials, and videos.

The module consists of 7x two-hour lectures:

Week Topics covered
1 Introduction: Macroeconomic Policy
2 Monetary Policy (I): Central Banks
3 Monetary Policy (II): Conventional Money Policy Tools
4 Monetary Policy (III): Unconventional Money Policy Tools
5 Monetary Policy (IV): Conduct of Money Policy
6 Fiscal Policy (I): A National Blessing Or a Public Curse?
7 Fiscal Policy (II): A National Blessing Or a Public Curse?


This module is available on following courses: