This course is part of the Managerial Economics and Business Analysis Specialization

Hadi Salehi Esfahani

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Part of the Master of Business Administration (iMBA) degree

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Managerial Economics and Business Analysis SpecializationUniversity of Illinois at Urbana-Champaign

About this Course

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This course examines macroeconomic performance in the short run and the long run based on the economy’s institutional and policy environment. The first module develops a model of macroeconomy in the short run when the price level has its own momentum and does not respond much to supply and demand forces. The model enables one to see how GDP, interest rate, and exchange rate are determined in the short run and how they respond to macroeconomic shocks and policies.
The second module starts the analysis of long-run equilibrium by examining the foreign exchange market. It then connects the long-run outcome with expectations about the future trends in the exchange rate at each moment, which constitute a key driver of the spot exchange rate in the short run. The methodology developed for this purpose can be applied to expectations concerning other macroeconomic variables as well. Finally, the long-run foreign exchange model is employed to derive a number of important lessons for the long run trends in currency values and competitiveness of producers in various countries.

The third module examines the drivers of aggregate output in the long run and the mechanisms of adjustment from the short run to the long run. The model provides insights about why some countries are much richer than others and why some economies grow faster than others over decades. The analysis also sheds light on why inflation varies across countries or over time in the same country. The model is employed to analyze the sources of macroeconomic instability and the roles of fiscal and monetary policies in stabilization or destabilization of the macroeconomy.

The final module discusses the characteristics of desirable macroeconomic policies and the reasons why actual policies deviate from them. It connects these deviations to country characteristics that one needs to take into account when assessing a country’s long-term macroeconomic environment. The module ends with a discussion of the institutional conditions that help bring about better fiscal and monetary policies.

At the end of this course, you will be able to:
•	Understand how the market for aggregate goods and services interacts with the money market to shape the macroeconomic equilibrium that determines income, interest rate, and exchange rate in the short run.
•	Understand the links between the short-run and long-run processes.
•	Assess the dynamic effects of macroeconomic policies and understand the roles of globalization, government policies, institutions, and expectations in macroeconomic outcomes.

This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see the Resource page in this course and onlinemba.illinois.edu.

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Course 4 of 7 in the

Managerial Economics and Business Analysis Specialization

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Beginner Level

Approx. 16 hours to complete

English

Subtitles: English

Instructor

Instructor rating

4.37/5 (51 Ratings)

Hadi Salehi Esfahani

Professor of Economics and Professor of Business Administration

Department of Business Administration, College of Business

32,605 Learners

2 Courses

Shareable Certificate

Earn a Certificate upon completion

100% online

Start instantly and learn at your own schedule.

Course 4 of 7 in the

Managerial Economics and Business Analysis Specialization

Flexible deadlines

Reset deadlines in accordance to your schedule.

Beginner Level

Approx. 16 hours to complete

English

Subtitles: English

Offered by

University of Illinois at Urbana-Champaign

The University of Illinois at Urbana-Champaign is a world leader in research, teaching and public engagement, distinguished by the breadth of its programs, broad academic excellence, and internationally renowned faculty and alumni. Illinois serves the world by creating knowledge, preparing students for lives of impact, and finding solutions to critical societal needs.

Start working towards your Master's degree

This course is part of the 100% online Master of Business Administration (iMBA) from University of Illinois at Urbana-Champaign. If you are admitted to the full program, your courses count towards your degree learning.

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Syllabus - What you will learn from this course

Content Rating93%(1,065 ratings)

Week

Week 1

1 hour to complete

Course Orientation

You will become familiar with the course, your classmates, and our learning environment. The orientation will also help you obtain the technical skills required for the course.

1 hour to complete

1 video (Total 7 min), 4 readings, 1 quiz

1 video

Welcome to Country Level Economics: Policies, Institutions, and Macroeconomic Performance!6m

4 readings

Syllabus10m

About the Discussion Forums10m

Glossary10m

Updating Your Profile10m

1 practice exercise

Orientation Quiz30m

5 hours to complete

Module 1: Aggregate Expenditure and GDP in the Short Run When Prices Are "Sticky"

What determines the GDP? In the previous course on Macroeconomic Variables and Markets, we saw how the exchange rate and the interest rate are determined given the real income, aggregate price level, and expectations about the future. This module focuses on GDP determination in the short run, which is a critical step in understanding macroeconomic fluctuations and the role of stabilization policies. Long-run trends, expectations, and price level movements will be examined in subsequent modules.

5 hours to complete

8 videos (Total 88 min), 2 readings, 5 quizzes

8 videos

Module 1 Introduction1m

1-1.1. The Determinants of "Preferred" Consumption Expenditure15m

1-1.2. The Determinants of "Preferred" Investment and Net Exports12m

1-2.1. Aggregate "Preferred" Expenditure and Equilibrium Income16m

1-2.2. Interest Rate and Equilibrium Income8m

1-3.1. Equilibrium Income and Fiscal and Monetary Policies in the Short Run13m

1-3.2. Aggregate Demand Shocks and Policy Responses in the Short Run13m

1-3.3 Short-Run Consequences of Temporary Changes in the Price Level and Other Exogenous Variables5m

2 readings

Module 1 Overview10m

Module 1 Readings10m

4 practice exercises

Lesson 1-1 Practice Quiz30m

Lesson 1-2 Practice Quiz30m

Lesson 1-3 Practice Quiz30m

Module 1 Quiz30m

Week

Week 2

2 hours to complete

Module 2: Expectations and the Long-Run Exchange Rate

Where do expectations about the future of economic variables come from? This question is important because expectations matter a great deal in the choices made by economic agents at every point in time. This is quite easy to see in the connection between the exchange rate in the spot market at each moment and the expected exchange rate in the future spot market. In this module, we examine the formation of exchange rate expectations based on a model of long-run equilibrium in the foreign exchange market. The model turns out to be very insightful regarding the factors that drive the real exchange rates and competitiveness of economies over the years.

2 hours to complete

4 videos (Total 32 min), 2 readings, 3 quizzes

4 videos

Module 2 Introduction1m

2-1.1. Expectations5m

2-2.1. Modeling the Long-Run Exchange Rates11m

2-2.2. Finding The Drivers of the Real Exchange Rate in the Long Run13m

2 readings

Module 2 Overview10m

Module 2 Readings10m

3 practice exercises

Lesson 2-1 Practice Quiz30m

Lesson 2-2 Practice Quiz30m

Module 2 Quiz30m

Week

Week 3

4 hours to complete

Module 3: Long-Run Economic Performance and Short-Run Adjustments

Why are some nations so much poorer than others? Why do some countries manage to grow fast over decades while others stagnate? What determines the real per capita income in a country in the long run? One goal of this module is to examine these fundamental questions in economics. The module also discusses the relationship between short-run and long-run equilibria and shows how the process of adjustment may lead to macroeconomic instability. It ends by examining the role of monetary and fiscal policies in stabilizing or destabilizing the economy as it goes through the adjustment process.

4 hours to complete

8 videos (Total 88 min), 2 readings, 4 quizzes

8 videos

Module 3 Introduction58s

3-1.1. Understanding the Long-Run Output11m

3-1.2. The Determinants of Production Capacity: Resources and Technology7m

3-1.3. The Determinants of Production Capacity: Institutions17m

3-2.1. Equilibrium Income and the Production Capacity: The Short Run vs. the Long Run17m

3-2.2. Aggregate Demand Shocks and Macroeconomic Stabilization Policies13m

3-2.3. Aggregate Supply Shocks and Macroeconomic Stabilization Policies9m

3-2.4. Applying the Macroeconomic Model to the Analysis of US Economy10m

2 readings

Module 3 Overview10m

Module 3 Readings10m

3 practice exercises

Lesson 3-1 Practice Quiz30m

Lesson 3-2 Practice Quiz30m

Module 3 Quiz30m

Week

Week 4

3 hours to complete

Module 4: Institutions and Macroeconomic Policies

Some countries seem to be much more prone to macroeconomic crises and stagnation than others. Why do policymakers in some countries fail to follow more productive and stabilizing policies? What roles do a country’s politics and institutions play in the policy choices by the government and the central bank? What factors and variables do we need to know about in order to be able to assess a country’s long-term macroeconomic prospects?

3 hours to complete

5 videos (Total 50 min), 3 readings, 4 quizzes

5 videos

Module 4 Introduction1m

4-1.1. Desirable Monetary and Fiscal Policies6m

4-2.1. Macroeconomic Policies and Political Decision-Making18m

4-3.1. How Can Countries Commit to Good Macroeconomic Policies?19m

Gies Online Programs3m

3 readings

Module 4 Overview10m

Module 4 Readings10m

Congratulations!10m

4 practice exercises

Lesson 4-1 Practice Quiz30m

Lesson 4-2 Practice Quiz30m

Lesson 4-3 Practice Quiz30m

Module 4 Quiz30m

About the Managerial Economics and Business Analysis Specialization

In order to effectively manage and operate a business, managers and leaders need to understand the market characteristics and economic environment they operate in. In this Specialization, you will build a solid understanding of the operation of markets and the macro-economic environment with real-world examples. You will be able to identify firm and country-level economic factors that impact business decisions, develop an analytical framework using statistical tools, and apply economic theory and data in the analysis of business environment and trends to make effective business decisions.

The capstone project involves an in-depth analysis of an actual business situation in which you will examine the global economic environment of a business. The final project will be a business plan that uses statistical tools and economic theory to create a comprehensive analysis of the microeconomic and macroeconomic environment in which the focal company operates. This Specialization is part of the University of Illinois Masters of Business Administration degree program, the iMBA. Learn more about the admission into the program here and how your Coursera work can be leveraged if accepted into the program. You can also start with for-credit courses within the Illinois iMBA degree program.

Managerial Economics and Business Analysis

Frequently Asked Questions

When will I have access to the lectures and assignments?
Access to lectures and assignments depends on your type of enrollment. If you take a course in audit mode, you will be able to see most course materials for free. To access graded assignments and to earn a Certificate, you will need to purchase the Certificate experience, during or after your audit. If you don't see the audit option:
The course may not offer an audit option. You can try a Free Trial instead, or apply for Financial Aid.
The course may offer 'Full Course, No Certificate' instead. This option lets you see all course materials, submit required assessments, and get a final grade. This also means that you will not be able to purchase a Certificate experience.
What will I get if I subscribe to this Specialization?
When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile. If you only want to read and view the course content, you can audit the course for free.
Is financial aid available?
Yes, Coursera provides financial aid to learners who cannot afford the fee. Apply for it by clicking on the Financial Aid link beneath the "Enroll" button on the left. You'll be prompted to complete an application and will be notified if you are approved. You'll need to complete this step for each course in the Specialization, including the Capstone Project. Learn more.
Will I earn university credit for completing the Course?
This Course doesn't carry university credit, but some universities may choose to accept Course Certificates for credit. Check with your institution to learn more. Online Degrees and Mastertrack™ Certificates on Coursera provide the opportunity to earn university credit.

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Country Level Economics: Policies, Institutions, and Macroeconomic Performance