Universidad Carlos III de Madrid

Course Description

  • Course Name


  • Host University

    Universidad Carlos III de Madrid

  • Location

    Madrid, Spain

  • Area of Study

    Business Administration, Economics, Management

  • Language Level

    Taught In English

  • Course Level Recommendations


    ISA offers course level recommendations in an effort to facilitate the determination of course levels by credential evaluators.We advice each institution to have their own credentials evaluator make the final decision regrading course levels.

    Hours & Credits

  • ECTS Credits

  • Recommended U.S. Semester Credits
  • Recommended U.S. Quarter Units
  • Overview

    The objective of this course is to give an introduction to macroeconomic theory at an intermediate level.
    To attain this objective the student must acquire knowledge, abilities and attitudes. By the end of this
    class, the student should be able to:

    - To understand the importance of technological and demographic change as well as capital
    accumulation in explaining the observed differences in GDP per capita across countries, as well as their
    differences in growth rates.
    - To understand the relationship between factor marginal productivity and prices.
    - To understand the concept of money neutrality and its relationship with price flexibility.
    - To analyze the long and short run effects of fiscal and monetary policies.
    - To analyze the effects of supply and demand shocks in closed as well as open economies.
    - To formalize intertemporal consumption and saving decisions.

    The abilities acquired by the students can be classified in two groups.

    Specific abilities:

    - Being able to find the relationship between prívate and public savings with investment and
    current account déficit.
    - Being able to analyze the short and long run effects of fiscal and monetary policy.
    - Finding the steady state of the Solow model.
    - Finding the equilibrium of the IS-LM and Mundell-Fleming model economies.
    - Solving a two period optimization problem.

    General skills:

    - The student must be able to critically evaluate the power of the theories studied in class to
    understand the macroeconomic evidence.
    - The student must be able to solve complex tasks working with other classmates.


    The main objective is to present the basic foundations of macroeconomic theory, starting with the basic
    macroeconomic model in the long run where prices are flexible. Next, we wil study the long run using the Solow model and we will study the effects of fiscal and monetary policies. Next, we turn to study the
    short run, when prices are rigid. We will analyze the evidence about fluctuations in GDP and its
    components and the effects of fiscal and monetary policies.

    PART 1: Classical Theory
    1. Natinal income, relationhsip between factor marginal productivity and prices. Factoral
    distribution of GDP. relationhsip between public and private savings and investment in the logn run.
    2. Money and inflation. The quantitative theory of money. The Fisher equation.

    PART 2: Growth: Solow model. Population and technological growth.

    PART 3: Business cycles.
    1. The IS-LM model for the closed economy.
    2. The Mundell-Fleming model for the open economy.

    PART 4: Microfundations: Consumption and savings.

    PART 5: Economic policy debates: Public debt and ricardian equivalence.

    (1) A considerable amount of instruction will be in the form of lectures. The objective is to develop
    a conceptual framework for understanding macroeconomics.
    (2) In-class discussion in order to apply the conceptual tools learned in class to case studies, current events, and recent policy debates.
    (3) Working with data, such as the Penn World Tables, in order to study relevant macroeconomic
    variables as well as assess the predictions of the models studied in class.
    (4) Problem sets. By solving the problem assignments, students are supposed to acquire required
    capacities and self-evaluate their knowledge.
    (5) The solution of the problem set will be done in class together with the students in order for them to
    gain a better insight into the conceptual tools and knowledge related to each assigned problem. This
    should help students develop the ability to analyze and communicate relevant information for solving
    these problems.

    The final grade will depend on homeworks (10%), quizzes in class (10%), midterms (40%) and a final exam (40%).
    The homeworks will be reviewed in class. Quizzes and midterms will take place in class time.

    % end-of-term-examination: 40
    % of continuous assessment (assigments, laboratory, practicals?): 60

Course Disclaimer

Please note that there are no beginning level Spanish courses offered in this program.

Courses and course hours of instruction are subject to change.

Eligibility for courses may be subject to a placement exam and/or pre-requisites.

Credits earned vary according to the policies of the students' home institutions. According to ISA policy and possible visa requirements, students must maintain full-time enrollment status, as determined by their home institutions, for the duration of the program.

ECTS (European Credit Transfer and Accumulation System) credits are converted to semester credits/quarter units differently among U.S. universities. Students should confirm the conversion scale used at their home university when determining credit transfer.

Please reference fall and spring course lists as not all courses are taught during both semesters.

Availability of courses is based on enrollment numbers. All students should seek pre-approval for alternate courses in the event of last minute class cancellations

Please note that some courses with locals have recommended prerequisite courses. It is the student's responsibility to consult any recommended prerequisites prior to enrolling in their course.


This site uses cookies to store information on your computer. Some are essential to make our site work; others help us improve the user experience. By using the site, you consent to the placement of these cookies.

Read our Privacy Policy to learn more.