Applied Economics

Introduction

Understanding Economic Forces and the Labour Market

Economics provides the framework for understanding the world we live in—from how individuals and firms make decisions, to how governments manage the country through crises. For HR students, this knowledge is essential for understanding the forces that shape the future of working life, wage development, and the strategic room for manoeuvre within organizations.

Throughout the course, students will acquire analytical tools for problem-solving. We examine how market power and strategic interaction affect firms, and why markets sometimes fail. In the macroeconomics section, we delve into labour market models (WS-PS) and explore how fiscal and monetary policies are used to dampen economic fluctuations.

The course is based on CORE ECON (Curriculum Open-Access Resources in Economics). This is a global framework that places contemporary challenges—such as inequality, power dynamics, and sustainability—at the heart of economic analysis. The goal is to provide students with skills directly relevant to careers in both the private sector and public administration, where the ability to interpret complex relationships is a key competency.

Course content

Microeconomics: Market Mechanisms and Firm Behaviour

• The Firm and the Market: Pricing, market power, and the difference between price-setters and price-takers.
• Market Efficiency and Intervention: Analysis of gains from trade (Pareto efficiency), as well as the effects of taxes and price controls.
• Market Failure: Management of externalities and public goods in an unregulated economy.
• Strategic Interaction: Introduction to game theory, including Nash equilibrium, social dilemmas, and coordination.

Macroeconomics: Fluctuations, Policy, and the Labour Market

• Measuring the Macroeconomy: GDP components, measuring output, inflation, and unemployment.
• The Labour Market (WS-PS Model): Wage and price setting, and factors determining equilibrium unemployment.
• The Multiplier Model: How demand shocks create ripple effects in the economy.
• Fiscal Policy: The state's role in dampening fluctuations through budgetary policy and automatic stabilizers.
• Monetary Policy: The role of the central bank, the policy rate, and the transmission mechanism towards a flexible inflation target.

Disclaimer

This is an excerpt from the complete course description for the course. If you are an active student at BI, you can find the complete course descriptions with information on eg. learning goals, learning process, curriculum and exam at portal.bi.no. We reserve the right to make changes to this description.