Duration: 3 hours per week - 13 weeks [ECTS: 6]

Course outline

The course deals with the Keynesian Macroeconomic Model which in contrast to the Neoclassical Model, which was, examined in Macroeconomic Analysis I is a brief economic analysis. In a short - lived period of time prices – for various reasons – are rigid and this means that nominal variables of economy as, for example, the product which is being manufactured. Thus, demand for a product may be the factor, which will regulate the quantity of the product, not technological, demographic and social developments.
Since the aim of this model is the demand of the economy as a whole, the first point under examination is the purchase of goods, the Keynesian cross and the IS curve, the money market and the LM curve. Brief economic fluctuations are analyzed through the IS –LM model, the effects of which are examined via the enforcement of public financing and monetary policy in the exercise of economic demand as a whole.
Models of the total economic offer are examined next. These models present a positive inclination as concerning their total offer curve. This may be caused by imperfections or imbalances in the labor market and in the production of a product. From such a total offer curve a brief relationship between inflation and unemployment can be deducted. We will examine the factors, which influence it, its relationship with possible expectations and its form, in the long term.
After gathering the aggregate Keynesian microeconomic system in its totality (total offer and demand), we will probe into matters of political stability, for example, whether political stability plays an active or a passive role, whether it should be exercised according to specific regulations, or whether it depends (each time) on economic politics. We will analyze the role of time lags, Lucas’s Critique and last but not least we will define the problem of time inconsistency.