Essential economics: macro and micro perspectives
This module provides an introduction to and intermediate development of economics, a fascinating and important discipline that can also be controversial. You’ll learn about the mainstream theories that are central to policymaking and business decision-making. You’ll also explore ideas from some of the competing schools of thought that make up the economic pluralism for which The Open University is renowned. The topics, ideas and theories covered are essential to a wider understanding of the world in which we all live and aim to thrive.
What you will study
The module is divided into five blocks. The first three blocks cover macroeconomics, the way the economy as a whole works and how policymakers try to influence this. The final two blocks look at microeconomics, including how firms and households make decisions.
Throughout, the module considers issues of: fragility, such as vulnerability of the economy to shocks and climate change; economic justice, in the face of rising inequality both within and between countries; and policy intervention, in particular what governments may do to address fragility and inequality.
Block 1: Economics, crises and connections
You’ll start by looking at a range of economic crises, gaining insights into why they happen, their impact, especially on households, and how data is used by economists to track the state of the economy. You'll then consider how economies are increasingly interconnected through trade and financial flows, which can, in equal measure, promote economic development and also fragility.
Block 2: The macroeconomic toolkit
Through the lens of the Great Depression of the 1930s, you’ll study the iconic theories of the economist, John Maynard Keynes, and how they have come back into fashion as governments turned to fiscal policy (tax and government spending) to grapple with the 2008 global financial crisis and the COVID-19 pandemic. You’ll also study the nature of money and how monetary policies have been critical in shaping the economy since 2008 and in response to the recent global inflation crisis.
Block 3: Applying the macroeconomic toolkit
You'll use a model of the economy in diagram form that's very similar to one used by central banks around the world. This will deepen your understanding of how unexpected events can shock an economy and the policy levers that the authorities can use to try to steer the economy back on track. You'll critique the use of such policies, particularly from the perspective of justice for wage earners.
Block 4: Regulating markets, promoting growth
In theory, competitive markets and firms should benefit everyone. But what happens when firms become so big that they can control prices and reap massive profits? You'll look at decision-making within firms, how markets work and why and how regulators intervene.
Block 5: Global growth and inequality
Returning to the idea of the interconnected world, you’ll look at why countries choose to trade with each other and who benefits both in theory and reality. Having considered how trade can magnify the inequalities between countries, you’ll turn to inequality within countries and what governments can do – if so minded – to reduce inequality. In the final chapter, you'll look at the economic theories that explain why climate change is such a difficult issue to address and how economics may hold some of the answers.
You will learn
You’ll learn a range of economic theories, modelling them mainly in diagrammatic form. You’ll also learn to apply a range of numerical and statistical techniques to analyse data, enabling you to draw conclusions about what is happening in an economy and to identify and give scale to social and economic problems that policy can address. This module includes an introduction to using Excel spreadsheet software to aid data analysis and the creation of charts.
There are no pre-requisites for studying this module. However, since this is an OU level 2 module, you are strongly advised to have completed OU level 1 studies first.
You should have up to 12 hours study time available each week for studying the module materials.
Before registering for this module, to help you decide whether you're ready to study at this level, you can take our Are you ready for D217? quiz. You will also find advice on preparatory materials you can study before you start in order to be better prepared for your studies.
You will find it helpful to have previously studied some basic mathematics. Our optional self-test (for one of our mathematics modules) will help you check that you are ready for this aspect of the module. Although this has been created to test your readiness for a different module, if you can answer most of the questions in Levels 1 and 3 of the test, or could do them with a quick reminder because the topic is familiar but you can’t quite remember the details, then you're ready to start this module.
If you have any doubt about the suitability of the module, please speak to an adviser.
You’ll be provided with two module textbooks, Economic essentials: macro perspectives and Economic essentials: micro perspectives, and have access to a module website, which includes:
- a week-by-week study planner
- module materials
- interactive online quizzes and other activities
- audio and video content
- assessment materials and guide
- online tutorials and forums
You'll have free access to Microsoft Office 365, including the spreadsheet software Excel. The module introduces you to using Excel and also contains several economic simulators which interactively bring to life the economic models you’ll study. The simulators are created in Excel and are yours to download and keep.
Where possible, the materials are available in other formats. These may include PDF, EPUB, interactive ebook (EPUB3), Kindle ebook and Microsoft Word to enable you to study on the move.
You’ll need broadband internet access and a desktop or laptop computer with an up-to-date version of Windows (10 or 11) or macOS Monterey or higher.
Any additional software will be provided or is generally freely available.
To join in spoken conversations in tutorials, we recommend a wired headset (headphones/earphones with a built-in microphone).
Our module websites comply with web standards, and any modern browser is suitable for most activities.
Our OU Study mobile app will operate on all current, supported versions of Android and iOS. It’s not available on Kindle.
It’s also possible to access some module materials on a mobile phone, tablet device or Chromebook. However, as you may be asked to install additional software or use certain applications, you’ll also require a desktop or laptop, as described above.