Economic Policy


This course uses the tools of macroeconomics to study various macroeconomic policy problems that occurs in the economy in the short-run. Macroeconomic theory is covered to analyze these macroeconomic problems. Policy implementations to solve macroeconomic problems are introduced.


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There are several books that I can recommend. We use some chapters from each text. You can find them in the course plan.


F. Mishkin, Macroeconomics: Policy and Practice, 2nd Edition, Pearson.

Main Textbook




G. Mankiw, Macroeconomics, 8th edition, Palgrave Macmillian

Chapters 10,11,12,13,14



Course Plan

Lecture 1: Introduction to Economic Policy: Economic Analysis  

Lecture Note

Mishkin-Chapter 1 and 2


Economic Models: Simulations of Reality

Micro and Macro: The Economic Divide

Econometrics: Making Theory Count

Lecture 2: Short Run in the Economic Policy: Explaining Business Cycles  

Lecture Note

Mishkin-Chapter 8.

Mankiw-Chapter 9.


Business Cycles

What is Keynesian Economics

Output Gap

Recession :  When Bad Times Prevail

Lecture 3 : Macroeconomic Basics 

Lecture Note

Mishkin-Chapter 5


What is Money?

Inflation: Prices on the Rise

Lecture 4 : Analysis of Business Cycles I : The Demand Side of the Economy 

Lecture Note

Mishkin, Chapters 9-10-11

Mankiw, Chapters 10-11

Lecture 5 : Analysis of Business Cycles II : The Supply Side of the Economy 

Lecture Note

Mishkin, Chapter 11.

Mankiw, Chapter 13.

Lecture 6 : Aggregate Demand – Aggregate Supply Model : Policy Analysis 

Lecture Note

Mishkin – Chapter 12 and 13


Supply and Demand : Why Markets Tick?

Lecture 7 : A Dynamic Model of Economic Fluctuations

Lecture Note

Lecture 8 : Monetary Policy 

Lecture Note

Merkez Bankacılığı ve Para Politikası


Inflation Targeting : Holding the Line

Monetary Policy: Stabilizing Prices and Output

Lecture 9 : Macroeconomic Policy 

Lecture Note


Current Account Deficits: Is There a Problem?

Fiscal Policy: Taking and Giving Away

Capital Accounts: Liberalize or Not?

Lecture 10 : The Role of Expectations in Macroeconomic Policy – Modern Business Cycle Theory

The Role of Expectations

Modern Business Cycle Theory

Lecture 11 : Long Run in the Economy

Solow Model

Romer Model

Long Run in the Economy