This course introduces core models of New Keynesian macroeocomics, with particular emphasis on its analytic structure.

Upon completion of the macroeconomics part of this course, students are able

• to explain and analyse macroeconomic models (in the New-Keynesian tradition) with imperfectly competitive goods markets;

• to provide an overview of various possibilities to include imperfectly competitive labour markets in macroeconomic models;

• to explain and analyse one central macroeconomic model with imperfectly competitive goods and labour markets;

• to provide an overview of the role of money and money supply in macroeconomics models;

• to explain the role of nominal and real rigitidities in macroeconomics models;

• to evaluate strengths and weaknesses of the above mentioned models (including their fit with empirical evidence);

• to derive and evaluate policy implications;

• to review contributions in journals of general interest (e.g. the Journal of Economic Perspectives; the Journal of Economic Literature) as well as core macroeconomics journals (e.g. the Journal of Macroeeconomics).

Attendance is mandatory. Absence not exceeding two units is accepted.

The course is closely based on the literature indicated below. Students are expected to prepare the relevant sections before the course meetings. The course meetings will include a lecture focusing on difficult parts in the reading assignments; in-class exercises (possibly including very short quizzes - "clicker tests" - involving multiple or single choice questions); discussion of and feedback on (group) homeworks, and possibly also short presentations by students.

In total, 100 points are obtainable:

• (Group) Assignments + inclass exercises: 40 points
• Midterm: 20 points
• Endterm: 40 points

Minimum requirements for a positive grade:

• Overall 50 points (or more)
• Minimum 24 out of 60 on both exams
• Minimum 16 points out of 40 on assignments+inclass excecises

Grading scheme:

• Sufficient (4): ≥ 50 points
• Satisfactory (3):≥ 62.5 points
• Good (2): ≥ 75 points
• Excellent (1): ≥ 87.5 points

1. Solid knowledge and routine handling of intermediate macroeconomics at the level of basic text books (keywords: IS-LM model and its extension to a model with aggregate supply and aggregate demand; bibliographical reference e.g. Blanchard: Macroeconomics, 7th edition, Pearson, chapters 1-9)

2. Routine handling of basic microeconomic concepts (keywords: household optimum and the derivation of consumption demand and labour supply derivation; properties of Cobb-Douglas utility or production functions, monopoly price formation)

flexible; arrange a meeting on short notice via email ingrid.kubin@wu.ac.at