Every day there is something related to macroeconomics in the news. Examples include
- The NZ Dollar fell against all major currencies overnight
- The Governor of the Reserve Bank announced higher capital requirements for commercial banks
- The commercial banks are expected to pass on the recent cut in the OCR
- The government has announced a revised target for the ratio of debt to GDP
- There was a further slowdown in productivity in the third quarter.
- Long term bond rates are now below the 90 day bill rate
- Inflation remains outside the target band agreed to by the RBNZ
- The government still expects a budget surplus in the current financial year.
It is not always easy to make sense of all this and sift out what matters from the noise. And to figure out what is related to what, and where there are causal links.
The objective of this short course is to provide participants with a basic appreciation of the principal concepts of macroeconomics with emphasis on their application to public policy analysis. To do this the course will help participants to understand:
- the nature of economic aggregates by providing a primer on basic concepts that underpin the macroeconomy;
- the role of government in (a) providing the statutory framework (eg the Public Finance Act 1989, the Reserve Bank of New Zealand Act 1989) and (b) shaping the decisions of individuals and firms throught its role in savings, investments, tax and welfare and foreign exchange; and
- the micro foundations of macroeconomics by appreciating that all outcomes in the macroeconomy are the results of decisions taken by households and firms.
On completion of this course participants will:
- have an understanding of key macroeconomic terms and concepts;
- be able to relate these to current policy debates; and
- appreciate how macroeconomic outcomes reflect the microeconomic decisions of firms and households and the role of government in shaping those decisions through policies related to stabilisation, taxes, welfare, trade, savings and investment.