* Understand the basic jargon of macroeconomics (inflation, GDP, unemployment, monetary and fiscal policy)
* Understand the dynamics of different kinds of crises
* Understand the goal of the central bank
* Understand the tools at the disposal of central banks
* Understand government debt
* Understand the impact of policies on the economy
* Understand the role of credit in the economy

The global financial crisis and the more recent Corona slowdown had a lot in common. However, much was different about their causes. Therefore, economic policies to cope with these two crises have been very different, and rightly so. In this course you will learn the macroeconomic approach to economic crises. Through this model, shared by most policy institutions around the world, you will learn the ropes of economic policies to counter different types of crises. We will see that economic and financial crises have often different dynamics. For this reason, policy makers are faced with different choices. We will cover the important challenges that central banks enacting monetary policy face at the zero lower bound. We will also discuss the dangers of a runaway government debt, and the role of fiscal policy. Finally, we will observe the crucial role of financial institutions and animal spirits in amplifying swings in the business cycle.
Applications in the course will often focus on the recent history and policy in Europe, with an emphasis on the choices of the European Central Bank.

Carlin & Soskice, 2015

• EBC1009 "Economics and Business" OR EBC1018 "Macroeconomics"
• EBC1005 "Quantitative Methods I"