ECM603: Advanced Macroeconomic Analysis

Module code: ECM603

Module provider: Economics; School of Philosophy, Politics and Economics

Credits: 20

ECTS credits: 10

Level: 7

When you’ll be taught: Semester 1

Module convenor: Dr Mark Guzman, email: m.g.guzman@reading.ac.uk

Pre-requisite module(s):

Co-requisite module(s):

Pre-requisite or Co-requisite module(s):

Module(s) excluded:

Placement information: NA

Academic year: 2026/7

Available to visiting students: Yes

Talis reading list: Yes

Last updated: 25 March 2026

Overview

Module aims and purpose

This module builds upon the previous (undergraduate) microeconomic, macroeconomic, and mathematics courses studied. It is intended to introduce students to the basic concepts of economic modelling by applying previously learned economics in a more formal, structured way. In particular, students will learn what constitutes a formal model, how micro-foundations form the basis of modern macroeconomic models, and how to use formal mathematical models to answer economic questions and analyze real world policies.

Module learning outcomes

By the end of the module, it is expected that students will be able to:

1. Understand what constitutes formal economic models and how they are constructed.
2. Apply these modelling techniques to answer basic economic questions and to analyze real-world policies. This includes having a detailed understanding of the various parts of an economic model, expressing a formal model mathematically, understanding the application of microeconomic theories to macroeconomic models, understanding the differences between partial and general equilibrium models, and being able to use mathematical models to understand real-world economics.
3. Apply theories such as the permanent income hypothesis and Ricardian equivalence.
4. Understand the role of the First and Second Welfare Theorems in modelling.
5. Prove the existence and uniqueness of both steady state and dynamic equilibria.
6. Understand the impact of policy (for example fiscal and monetary policy) on equilibria and transitional dynamics.

Module content

Basic topics include: defining and understanding the basic components of an economic model, understanding the role of utility and profit maximization in a well-define economic model, understanding how all aspects of an economy are expressed precisely and mathematically, understanding the solution concept of equilibria, understanding the different types of equilibria and their properties, and using simple models to answer questions and analyze policies. Additional topics may include: application of theories such as the permanent income hypothesis and Ricardian equivalence, understanding the role of the First and Second Welfare Theorems in modelling, and proving the existence and uniqueness of both steady state and dynamic.  Models covered will include standard overlapping generations models, Diamond Production model, Diamond-Dybvig Model, and may also include models such as Real Business Cycle models, Solow Growth Models, etc.

Structure

Teaching and learning methods

Detailed guidance on the topics covered will be provided in the weekly lectures and in computer classes, together with examples, exercises and solutions to facilitate understanding of key concepts. Students will be expected to supplement the lectures with the recommended reading of articles and book chapters and to do some research using the library, internet or other resources. Office hours are available for students to consult the lecturer on an individual basis.

Study hours

At least 24 hours of scheduled teaching and learning activities will be delivered in person, with the remaining hours for scheduled and self-scheduled teaching and learning activities delivered either in person or online. You will receive further details about how these hours will be delivered before the start of the module.

Please note the independent study hours above are notional numbers of hours; each student will approach studying in different ways. We would advise you to reflect on your learning and the number of hours you are allocating to these tasks.

Semester 1 The hours in this column may include hours during the Christmas holiday period.

Semester 2 The hours in this column may include hours during the Easter holiday period.

Summer The hours in this column will take place during the summer holidays and may be at the start and/or end of the module.

Assessment

Requirements for a pass

Students need to achieve an overall module mark of 50% to pass this module.

Summative assessment

Penalties for late submission of summative assessment

The Support Centres will apply the following penalties for work submitted late:

Assessments with numerical marks

• where the piece of work is submitted after the original deadline (or a DAS-agreed extension as a reasonable adjustment indicated in your Individual Learning Plan): 10% of the total marks available for that piece of work will be deducted from the mark for each calendar day (or part thereof) following the deadline up to a total of three calendar days;
• where the piece of work is submitted up to three calendar days after the original deadline (or a DAS-agreed extension as a reasonable adjustment indicated in you Individual Learning Plan), the mark awarded due to the imposition of the penalty shall not fall below the threshold pass mark, namely 40% in the case of modules at Levels 4-6 (i.e. undergraduate modules for Parts 1-3) and 50% in the case of Level 7 modules offered as part of an Integrated Masters or taught postgraduate degree programme;
• where the piece of work is awarded a mark below the threshold pass mark prior to any penalty being imposed, and is submitted up to three calendar days after the original deadline (or a DAS-agreed extension as a reasonable adjustment indicated in your Individual Learning Plan), no penalty shall be imposed;
• where the piece of work is submitted more than three calendar days after the original deadline (or a DAS-agreed extension as a reasonable adjustment indicated in your Individual Learning Plan): a mark of zero will be recorded.

Assessments marked Pass/Fail

• where the piece of work is submitted within three calendar days of the deadline (or a DAS-agreed extension as a reasonable adjustment indicated in your Individual Learning Plan): no penalty will be applied;
• where the piece of work is submitted more than three calendar days after the original deadline (or a DAS-agreed extension as a reasonable adjustment indicated in your Individual Learning Plan): a grade of Fail will be awarded.

Where a piece of work is submitted late after a deadline which has been revised owing to an extension granted through the Assessment Adjustments policy and process (self-certified or otherwise), it will be subject to the maximum penalty (i.e., considered to be more than three calendar days late). This will also apply when such an extension is used in conjunction with a DAS-agreed extension as a reasonable adjustment.

The University policy statement on penalties for late submission can be found at: https://www.reading.ac.uk/cqsd/-/media/project/functions/cqsd/documents/qap/penaltiesforlatesubmission.pdf

You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

Formative assessment

Formative assessment is any task or activity which creates feedback (or feedforward) for you about your learning, but which does not contribute towards your overall module mark.

Reassessment

Additional costs