Postgraduate taught 

Economics, Banking & Finance MSc

Business Cycles: Theory, Evidence and Macroeconomic Policy ECON5118

  • Academic Session: 2021-22
  • School: Adam Smith Business School
  • Credits: 20
  • Level: Level 5 (SCQF level 11)
  • Typically Offered: Semester 2
  • Available to Visiting Students: No
  • Available to Erasmus Students: No

Short Description

The course will offer an overview of the causes and consequences of short-run business cycles as well as how macroeconomic policies aim to stabilise these booms and busts in aggregate economic activity. The course motivates the various theories using current macroeconomic data and encourages active use of this data through case studies, problem sets and an assessed Group Project.


One two-hour lecture per week for 10 weeks.

Excluded Courses





There are two pieces of assessment for this course including a group work project (30% of mark) and a final exam (70% of mark). These assessments will provide an evaluation of how the students have met the aims and intended learning outcomes, set out above. Assessment criteria for the Group Project and the Final Exam are discussed below.

Main Assessment In: April/May

Course Aims

The course aims to introduce students to modern short-run macroeconomic theory and policy, providing insights into trends in cross-country macroeconomic data, inflation, unemployment, business cycles, inequality and the effects of fiscal and monetary policy. This treatment will provide students with the ability to recognise and apply the relevant theory and data to the analysis of important and topical macroeconomic questions.

Intended Learning Outcomes of Course

By the end of this course students will be able to:

1. Evaluate the importance of macroeconomic data in understanding how trends in living standards, inequality and business cycles have changed over time and across countries.

2. Assess the origins and consequences of high and persistent inflation and unemployment.

3. Apply the tools required to set up and solve simple short-run models of aggregate demand and supply.

4. Critically assess the role of monetary and fiscal policy in stabilising short-run business cycles.

5. Apply the relevant data and theory to the analysis of the causes and effects of the Great Recession of 2007 the Great Shutdown of 2020.

6. Critically assess the usefulness of modern macroeconomic models for understanding the causes, consequences, and policy solutions for business cycles.

Minimum Requirement for Award of Credits

Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.