This session will introduce you to the structure of the module. Economics as a science will be differentiated from other activities, skills and sciences. We will discuss the methods, specificity and importance of economics as a human/social science.

The scarcity of economic resources implies competition for their use. This means economic interests are involved at all levels of economic interaction. In the worst cases this competition will degenerate into conflict and even war. We shall here analyse the complexity of economic relationships from the specific stakeholder perspectives of households, firms and states. We shall also consider the question whether economics could reduce the dangers of conflict by objectifying interests scientifically.

Make your own personal stakeholder dartboard.

The economy evolves in time, driven by factors such as political events, changes in society and technological innovation. But this evolution is not smoothly linear, it can be seen as a succession of booms and busts. This has lead to the idea of the cyclical nature of the economy. In one way or another, all great economists have been concerned with the ideal, if not to eradicate, at least to soften the effects of disruptive economic crises. In this session we will see how the science of economics has evolved from the XVIIIth century physiocrats to contemporary monetarism.

Online (NEO) test covering lessons 1 to 4 of the module and consisting of concept definition exercises (5 questions).

Value is created by transforming production factors (labour, raw materials, capital, …) into goods and services needed or desired by customers. We shall see that value cannot be immediately translated into a price without the mediation of a specific mechanism which is called a market. By obeying the laws of demand and supply, free markets ideally achieve an equilibrium at which the price of goods and services is fair and the resources used to produce them are optimally allocated.

Any market equilibrium is per definition temporary, and external factors can influence the relationship between supply and demand. In reality some markets do not achieve equilibrium even when the forces of supply and demand have had time to adjust. This is mostly due to governmental pricing intervention. We shall see how such intervention usually results in persistent shortages or surpluses. In the second part of this session we will discover what money is and that money markets themselves are also subject to the laws of demand and supply.

Summarise a short article about an economic topic.

Summative online (NEO) test covering lessons 5 to 9 of the module and consisting of paraphrasing exercises (3 questions). Sentences or short texts will be asked to be re-formulated in a manner that explains its meaning in another form.

We have seen that one of the pre-suppositions of economics as a science is the profit-maximizing behaviour of humans. In this session we shall see how this can be understood. To produce a service or a good necessarily entails costs. On the other hand, to be viable, firms need to generate a profit in the long-run. So, how can this be achieved, and under what conditions does one know that a firm is performing optimally within certain market conditions?

In this session we will look at how marketeers use economic information to fight for the customer's “share of wallet”. Media play a central role in the related competition for customer and investor attention. We shall study this concretely by comparing the content offered by some of the most important economic and financial sources of information.

Macro-economics look at the economy “as a whole”. One way representing the totality of an economy as a self-contained system is by using circular flow models. Traditionally macro-economics has been concerned with three main issues: economic growth, price stability and (un)employment. The political reasons for focusing on these three issues will be discussed in detail.

Summarise a short article about an economic topic.

Economic growth is critical to the development of modern societies. Hence, growth indicators are probably the most discussed issue in macro-economics. But, it is not only the numbers themselves that are being hotly debated by politicians, economists and the media, but also the way they have been calculated and by which institution. This is a hot topic, because credible growth numbers are considered a sound basis for economic as well as political decision making.

Employment and the stability of prices are, besides growth, evidently essential to the well-being of the citizens. They are, for instance, highly relevant to the setting of interest rates. They are attentively scrutinized, not only by politicians and economists, but also by a whole range of professionals, such as financial managers, academics, bankers, trade union leaders, entrepreneurs, secret services, and … the media.

Summative online (NEO) test covering sessions lessons 10 to 17 of the module consisting of concept definition exercises (5 questions).

A classic method to measure the economy “as a whole” is to add up the totality of supply and demand of an economy. This method has been inspired by micro-economic, bottom-up reasoning. It has the advantage to expose the constitutive components of the economy. We will use this aspect of the method to provide an insight into the interrelatedness of the economy “as a whole”.

Summarise a short article about an economic topic.

If micro-economic equilibrium is probably an exception in reality, macro-economic equilibrium is very probably an illusion. The aggregate supply and demand model has obvious limitations and a lot of critics, so why study it at all? The model, however deficient, provides an insight into the factors causing the perpetual disequilibrium of the economy “as a whole”. We will discuss the most important ones, such as governmental policy and the business cycle, in this session.

Summative online (blackboard) test covering 14 to 18 of the module consisting of paraphrasing exercises (3 questions). Sentences or short texts will be asked to be restated in a manner that explains its meaning in another form.

It is in matters of taxation that economics and politics are the most closely intertwined. A state, like any economic agent, needs income to pay for the cost of production of its goods and services. The levying of taxes is the most common way for states to generate revenue. This involves three main issues: the nature of the taxes, their rate or level, and the question as to whom they apply. Especially the last issue is politically sensitive and raises many moral questions concerning social justice. These will also be addressed in this session.

Summarise a short article about an economic topic.

Since the second part of the XX th century the vast majority of democracies have taken two momentous political decisions: to depart from the gold standard of exchange rate and to devolve monetary policy to a central banking system. We shall have look at the ideas that are on the basis of these major decisions and which have mainly been formulated in the quantity theory of money. We will relate questions of monetary policy to the origins of the “great recession” and the actuality of its aftermath.

As final test of the module the students will be required to write summary of two articles concerning a related economics topic.