Introduction to Economic Policy

Module Code: EC1040

Module Name: Introduction to Economic Policy

• ECTS Weighting: 10
• Semester/Term Taught: Michaelmas + Hilary Term
• Contact Hours: 44 hours of lectures and 20 hours of tutorials
• Module Personnel: Lecturer - Majella Brereton / Lecturer - Ronan Lyons

Learning Outcomes

On successful completion of the two modules in this course, you will be able to:

• Explain in detail the concepts of demand, supply and prices and illustrate shifts and movements in demand and supply curves.  Discuss the concepts of equilibrium and elasticity
• Explain the causes of market failure
• Understand how income inequality is defined and how poverty is measured in an economic context
• Evaluate the benefits of competition versus a monopoly and oligopoly
• Understand the basic structure of the economy and what drives economic growth
• Identify the causes of the current domestic and international economic crisis
• Understand what the aims and means of government economic policy are
• Understand important markets in everyday life, such as housing and labour markets

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Module Learning Aims

The first part of this module aims to provide students with a comprehensive outline of some of the core elements of micro economics and their applications. By the end of the first half of the module it is hoped that students will be able to use their knowledge of economic theory and policy so as to have a better understanding of the drivers of demand and supply and of the decision making processes of individuals and businesses.  Students should also have an understanding of how governments can sometimes improve market outcomes.

The second part of this module aims to provide students with a comprehensive outline of some of the core elements of macroeconomics and their applications. By the end of the second half of the module it is hoped that students will be able to use their knowledge of economic theory and policy so as to have a better understanding of how an economy functions and to help their decision making processes in later life.

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Module Content

Michaelmas Term:

A. Introduction to Economics: How markets work

1. Introduction to the subject of Economics, Opportunity Cost and Choice
2. The characteristics of different demand and supply curves, equilibrium and elasticity
3. Household choice, budget constraints and the concept of utility
4. The Production function and how firms make decisions

B. Market Failure

1. Externalities
2. Public Goods

C. Income Distribution and Taxation

1. Poverty and Income Distribution
2. Taxation

D. Market structures

1. Perfect Competition
2. Monopoly
3. Oligopoly
4. Monopolistic Competition

Hilary Term

A. National Economies

1. Why do we measure income, not happiness? National accounts, GNP & GDP
2. When and why did economies start growing? Economic growth, the Industrial Revolution, from Malthus to growth
3. Why is the world economy in crisis? The business cycle, recessions, booms and bubbles

B. Government Policy

1. Should Ireland leave the euro? Interest rates, inflation, monetary policy and banking
2. Will our grandchildren still be paying for our mistakes? Fiscal policy, taxes & government finances
3. Should we protect Irish jobs from imports? International trade & competitiveness

C. Macroeconomics in your life

1. Should we reintroduce third-level fees? Unemployment, human capital & the labour market
2. Should I rent or buy? Pensions, mortgages & the housing market
3. Why do we live where we do? Migration, amenities & economics outside the market

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Recommended Reading List

Given the different backgrounds of students in the class it is difficult to recommend one textbook.

For those starting out in Economics for the first time, Gregory Mankiw and Mark P. Taylor's Economics (South-western: Cengage learning) is recommended.

There are a multitude of basic textbooks on economics. Students should browse in the Lecky to consult some of these. Bade and Parkin's Foundations of Macroeconomics is worth consulting. For those wishing to learn about the background to economic theories they could read Paul Strathern's A Brief History of Economic Genius (Texere, London and New York, 2001), Todd G. Buchholz's New Ideas from Dead Economists (Penguin 1989; re-print 1999) and Robert Heilbroner's classic The Worldly Philosophers (1953; re-print Simon and Schuster, 1991)

For the second semester, students should also download a copy of the latest Central Bank of Ireland Quarterly Bulletin from the internet.

Assessment Details

The final exam amounts to 70% of the marks for this module. In the first semester there is a group work project accounting for 15% and in the second semester there is an individual assignment worth 15%.

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Module Website

Michaelmas Term: Blackboard

Hilary Term: Blackboard

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