NATIONAL OPEN UNIVERSITY OF NIGERIA 
                         
                         
       ADVANCED MACROECONOMIC THEORY  
                      ECO712 
                         
        
              SCHOOL OF POSTGRADUATE STUDIES 
        FACULTY OF SOCIAL SCIENCES, DEPARTMENT OF ECONOMICS 
                    COURSE GUIDE 
        
                    Course Developer: 
              BAKARE-AREMU, Tunde Abubakar (PhD) 
        Department of Economics National Open University of Nigeria, Abuja, Nigeria  
                       and 
                OSOBASE, Anthony Onogazie (PhD) 
         Department of Economics, University of Lagos, Akoka, Lagos, Nigeria. 
                         
                    Course Developer: 
                  Professor Lawrence Ohale 
       Department of Economics, University of Port Harcourt, Choba, Rivers State, Nigeria 
           ADVANCED MACROECONOMIC THEORY                                ECO 712 
           CONTENTS 
           Introduction 
           Course Contents 
           Course Aims 
           Course Objectives 
           Working through This Course 
           Course Materials 
           Study Units 
           Textbooks and References 
           Assignment File 
           Presentation Schedule 
           Assessment 
           Tutor-Marked Assignment (TMAs) 
           Final Examination and Grading 
           Course Marking Scheme 
           Course Overview 
           How to Get the Most from this Course 
           Tutors and Tutorials 
           Summary 
             
             
             
             
             
             
             
             
             
             
             
             
             
             
             
            
            
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           ADVANCED MACROECONOMIC THEORY                                ECO 712 
              INTRODUCTION 
            The course, Advanced Macroeconomics Theory (ECO 712) is a semester core course 
            which  carries  three  credit  units  for  Postgraduate  Diploma  level  in  economics 
            department  and  those  that  may  choose  it  as  service  course,  in  the  School  of 
            Postgraduate studies, at the National Open University, Nigeria. This coursework will 
            be useful in your academic pursuit and help to gain in-depth insight in Advanced 
            Macroeconomic theory. 
            This  course  is  simplified  for  easy  assimilation  for  the  student  of  postgraduate 
            diploma who might have little or no knowledge of economics at  post-secondary 
            level. However, for student to assimilate faster, practice question would be given at 
            the end of each unit, this will also prepare the student for the semester examination. 
            Also,  some  general  guidelines  are  suggested  for  easy  assimilation  and  time 
            management required of learner on each unit in order to achieve the optimum course 
            aims and objectives successfully. It also provides you with some guidance on your 
            Tutor Marked Assignments (TMAs) as contained herein. 
            Course Contents 
           The course is made up of twenty-one units (seven modules) spread across twenty-one 
           lectures weeks and covering areas such as the Revision of income determination from 
           simple  closed  economy  to  a  four-sector  economy;  Detailed  theories  of  consumption  and 
           investment functions; The classical and Keynesian theories, the theory of inflation; Business 
           cycles and forecasting; The relation of these issues to leading problems in public policy; The 
           rationale  for  the  existence  of  the  public  sector,  formulation  of  national  economic  policy; 
           Planning  principles  and  analysis;  Policy  objectives,  instruments  and  implementation,  
           Balance  of  payments  equilibrium  and  disequilibrium;  balance  of  payments  adjustment 
           mechanism; devaluation, contemporary issues in public policy in Nigeria. 
           Theory of money, Macroeconomic policy models, theory of prices level, internal and 
           external balance and lastly economic growth theory. 
            Course Aims and objectives 
            The  course  aims  to  give  users  in-depth  understanding  of  the  Advanced 
            Macroeconomic theoretical background and prepare the student with policy mix with 
            which macroeconomic disequilibrium could be tackled. Also, the course is prepared 
            in a way in which the users would easily augment their previous knowledge (if any) 
            with the new ideals. Also, the course aims to help users develop critical thinking 
            skills,  learn  how  to  evaluate  economic  arguments,  and  understand  the  roles  of 
            Macroeconomic  thought  in  guiding  current  economic  policies  and  debates. 
            Furthermore,  the  course  is  prepared  in  such  a  way  to  give  deep  insight  about 
            macroeconomic  analysis  and  policy  development  for  the  pursuance  of  a  master 
            degree in Economics. 
             
            
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           ADVANCED MACROECONOMIC THEORY                                ECO 712 
            However, the overall aims of the course will be achieved by: 
            Explaining what macroeconomic entails. 
            Establishing distinction between Macroeconomics and Microeconomics 
            Understanding clearly the Concept of Saving, Consumption and Investment 
            Discussing  income  determination  from  simple  closed  economy  to  a  four-sector 
            economy national income models with special reference to classical and Keynesian 
            models. 
            The classical and Keynesian theory of interest rate determination  
            Explaining the theory of inflation; Business cycles and forecasting 
            The rationale for the existence of the public sector, formulation of national economic 
            policy through Macroeconomic Policy objectives, and instruments  
            Critical analysis of Keynesian, monetarist and Post-Keynesian theories, the Demand 
            for, and Supply of money and their impact on effectiveness of Monetary and Fiscal 
            policies, 
            Explaining the theory of Economic Growth and Development  
            Discussing the evolution of money-barter trade and counter trade overview.  
           Working through the Course 
           To  successfully  complete  this  course,  you  are  required  to  read  the  study  units, 
           referenced books and other materials on the course. 
           Each unit contains self-assessment exercises called Self Assessment Exercises (SAE). 
           At  some  points  in  the  course,  you  will  be  required  to  submit  assignments  for 
           assessment purposes. At the end of the course there is a final examination. This course 
           should  take  about  15weeks  to  complete  and  some  components  of  the  course  are 
           outlined under the course material subsection.  
              Course Material  
            The major component of the course and what you have to do and how you should 
            allocate your time to each unit in order to complete the course successfully on time 
            are listed follows: 
            1.  Course guide  
            2.  Study unit 
            3.  Textbook 
            4.  Assignment file 
            5.  Presentation schedule  
                
            MODULE / STUDY UNIT 
            There are 21 units in this course which should be studied carefully and diligently. 
           Module 1 
            Unit 1:   An Overview of Macroeconomics Analysis 
            Unit 2:   Distinction between Macroeconomics and Microeconomics 
            Unit 3:   Essential tools of Macroeconomics analysis 
            
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