Macro subject guide PDF

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ECON10003 Introductory Macroeconomics SUBJECT GUIDE

Semester 2, 2019

Prepared by Nahid Khan and Lawrence Uren

Department of Economics Faculty of Business and Economics

Contents CONTENTS ................................................................................................................................................................. 2 SUBJECT OUTLINE .................................................................................................................................................. 3 INTRODUCTION .......................................................................................................................................................... 3 SUBJECT AIMS ........................................................................................................................................................... 3 PRESCRIBED REFERENCES ......................................................................................................................................... 3 LEARNING OUTCOMES ......................................................................................................................................... 3 SUBJECT OBJECTIVES ................................................................................................................................................ 3 GENERIC SKILLS ........................................................................................................................................................ 4 AWARENESS ISSUES ................................................................................................................................................... 4 PREREQUISITES ....................................................................................................................................................... 4 ACADEMIC STAFF CONTACT DETAILS ............................................................................................................ 5 LECTURER CONTACT DETAILS ..................................................................................................................................5 EMAIL PROTOCOL ...................................................................................................................................................... 5 LECTURES AND TUTORIALS................................................................................................................................ 6 LECTURE TIMES......................................................................................................................................................... 6 LECTURE SCHEDULE .................................................................................................................................................. 6 LECTURE SLIDES ....................................................................................................................................................... 7 TUTORIALS ................................................................................................................................................................ 7 USING LECTURE CAPTURE ......................................................................................................................................... 8 ASSESSMENT............................................................................................................................................................. 9 ASSESSMENT OVERVIEW ...........................................................................................................................................9 PLAGIARISM AND COLLUSION ................................................................................................................................. 10 LATE ASSIGNMENTS WILL NOT BE ACCEPTED .......................................................................................................... 10 SPECIAL CONSIDERATION ........................................................................................................................................10 REFERENCING ..........................................................................................................................................................10 OTHER SUBJECT RESOURCES ..........................................................................................................................11 LECTURER CONSULTATION .....................................................................................................................................11 TUTOR CONSULTATION ...........................................................................................................................................11 ONLINE TUTOR ........................................................................................................................................................ 11 PAST EXAMS............................................................................................................................................................11

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Subject Outline Introduction Welcome to Introductory Macroeconomics. This course is an introduction to macroeconomic theory and policy. The course begins by explaining how to measure economic performance at an aggregate level. Following that, we develop a series of economic models to try and understand how the aggregate economy behaves over time. It is an exciting time to study macroeconomics. There are many open questions that remain unresolved yet have important implications upon the welfare of individuals within our societies. For example: •

What was the underlying cause of the Global Financial Crisis in 2008 and what was the appropriate economic policy response?

•

How should we think about long-term fiscal sustainability in Australia and other countries?

•

What are the determinants of economic growth and why have some countries successfully developed while other countries have not?

Subject Aims The overall aim of this subject is to introduce macroeconomic theory and policy. Topics will include economic aggregates such as production and employment, the general level of prices and inflation, the exchange rate, interest rates, monetary and fiscal policies, the balance of payments and economic growth. Analysis is particularly directed to current macroeconomic problems and policy issues.

Prescribed References The required textbook for this course is “Principles of Macroeconomics, FIFTH Edition, by Bernanke, Olekalns, Frank, Antonovics and Heffetz, MacGraw Hill.” The textbook is available for purchase from the University Bookshop. It has also been placed upon reserve in the library.

Learning Outcomes Subject Objectives On successful completion of this subject students should be able to: • Explain the importance of the circular flow of income to macroeconomics • Interpret the meaning and measurement of macroeconomic aggregates such as Gross

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Domestic Product • Explain and use the Keynesian model of national income determination • Describe the roles of money and the financial system in the macroeconomy • Critically analyse macroeconomic policies appropriate to the achievement of the macroeconomic objectives • Explain and apply the aggregate demand/aggregate supply model • Explain the key features of the neoclassical model of growth • Analyse the factors influencing the balance of payments and the exchange rate.

Generic Skills In this subject you will have the opportunity to develop important generic skills. These skills are grouped below by level of development: • •

•

High level of development: written communication; collaborative learning; critical thinking; synthesis of data and other information; application of theory to practice. Moderate level of development: oral communication; problem solving; team work; interpretation and analysis; evaluation of data and other information; accessing data and other information from a range of sources; receptiveness to alternative ideas. Some level of development: statistical reasoning.

Awareness Issues At a broader level, studying this subject will increase your awareness of issues such as: • • • • •

macroeconomic arguments and theories and how they can be used to understand the current state of the economy both in Australia and internationally the nature of competing macroeconomic theories how macroeconomics enables the assessment of government policies the disparity in living standards across countries the effects of globalisation on economic welfare.

Prerequisites ECON10004, Introductory Microeconomics MAST10012, Introduction to Mathematics for students who did not achieve a score of at least 25 in Mathematical Methods or Specialist Mathematics in VCE Units 3 & 4 or equivalent.

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Academic Staff Contact Details Lecturer Contact Details Your subject coordinators for Introductory Macroeconomics are Nahid Khan and Lawrence Uren. Our contact details are below: Nahid Khan Email: [email protected] Room: 336 FBE Building (111 Barry Street) Phone: 83443621 Consultation Hours: Friday, 10:00am – 12:00pm or by appointment Lawrence Uren Email: [email protected] Room: 338 FBE Building (111 Barry Street) Phone: 83447915 Consultation Hours: Monday,10-11am and Tuesday, 11-12pm or by appointment

Email Protocol Please note that we are only able to respond to student emails coming from a University email address. Please do not use personal email addresses such as Yahoo, Hotmail or even business email addresses. Emails from non-University email addresses may be filtered by the University’s spam filter, which means that we may not receive your email. All correspondence relating to this subject will only be sent to your University email address. Note that you must first activate your University email address before you can send or receive emails at that address. You can activate your email account at this link: http://accounts.unimelb.edu.au/. While academic staff endeavor to address queries received via email, it is more appropriate to resolve substantive questions during lectures and tutorials and during normal consultation hours. With this in mind, we encourage students to attend all lectures and tutorials and to familiarise themselves with the consultation hours offered by the lecturers and tutors in this subject.

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Lectures and Tutorials Lecture Times

Lecture 1

Tuesday

9:00:00

Arts West B101, the Kathleen Fitzpatrick Theatre

repeated

Tuesday

11:00:00

Arts West B101, the Kathleen Fitzpatrick Theatre

Tuesday

14:15:00

Law GM15, David P. Derham Theatre

Tuesday

15:15:00

The Spot, B01, Copland Theatre

Lecture 2

Thursday

10:00:00

Arts West B101, the Kathleen Fitzpatrick Theatre

repeated

Thursday

11:00:00

Arts West B101, the Kathleen Fitzpatrick Theatre

Thursday

14:15:00

Arts West B101, the Kathleen Fitzpatrick Theatre

Thursday

16:15:00

The Spot, B01, Copland Theatre

Lecture Schedule This section provides a tentative outline of lectures for the entire semester. Week

Topic

Required Reading

1

Introduction & Measuring Output: GDP

Bernanke, Olekalns, Frank, Antonovics and Heffetz (BOFAH), Chapter 1- 2

2

Inflation and interest rates & Saving, wealth and investment

BOFAH, Chapter 3

The Labour Market & Short-term Economic Fluctuations

BOFAH, Chapter 5

4

Keynesian Model of the Economy

BOFAH, Chapter 7

5

Keynesian Model of the Economy & Fiscal policy

BOFAH, Chapter 8

6

Monetary policy, inflation and financial markets

BOFAH, Chapter 9 & 10

3

BOFAH, Chapter 4

BOFAH, Chapter 6

6

7

Aggregate Demand and Supply Model

BOFAH, Chapter 11 & 12

8

Introduction to Growth & Solow-Swan Model

BOFAH, Chapter 13 & 15

9

Solow-Swan Model

BOFAH, Chapter 14

10

International Trade

BOFAH, Chapter 16

11

Exchange Rates

BOFAH, Chapter 17

12

Balance of Payments

BOFAH, Chapter 18

Lecture Slides Lecture slides will be placed on the LMS page for this subject prior to each lecture under the heading “Lectures”.

Tutorials Tutorials commence in the second week of the semester on Monday, 5 August. Students are expected to attend a one-hour tutorial each week. Students enrol in a tutorial using the Student Portal. Tutorials in this subject will be conducted under a collaborative learning format. This means that the tutor will not stand in front of the tutorial giving a mini-lecture each week. The emphasis will be on student participation through discussing macroeconomic problems and issues in small groups. Each tutorial will consist of a pre-tutorial guide and a tutorial task list. The pre-tutorial guide will tell you what to read, learn and do to prepare for the next week's tutorial. This will be posted on LMS every Friday prior to each tutorial. It is essential that you prepare for each week's tutorial by working through the pre-tutorial guide for that tutorial. It is not long or difficult and it directly reinforces what you have learned in lectures. The second handout is the tutorial tasks list that will be distributed to you at the beginning of the class. It contains the exercises you will have to address in that tutorial. Note that you will not be told beforehand what questions you will have to answer in tutorials. It is therefore important that you prepare using the pre-tutorial guide. The format of the tutorials will be as follows: • • •

Each tutorial class will be split into groups of 4-5 students. The groups need not be the same every week but should not be larger than 5. Some weeks all groups will do the same questions, while in other weeks, each group will attempt a different question. After the questions have been answered, there will be a short presentation time where a spokesperson for each group will report back to the tutorial class.

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•

Students are expected to comment on other groups’ presentations.

You will be assessed on the extent of your participation (10 per cent of your final grade is based on tutorial work). Tutors will be instructed to allocate marks according to the following criteria: • • • •

Evidence of preparation for the tutorial Frequency of participation in discussion Relevance and logic of discussion Evidence of active listening to the contribution of others

Each week you will be asked to provide evidence of preparation for the tutorial in the form of notes or written answers to the pre-tutorial questions. If you are unable to provide this evidence of preparation, you will receive half the participation marks you would otherwise have received for that tutorial. If you miss a tutorial more than once, 1 mark will be deducted from your participation marks for each non-attendance. All of this means that you are expected to work actively in tutorials. Your tutor will be more than willing to help you with specific questions but the basis of tutorials will be group-based discussions. A student’s official tutor will determine tutorial participation marks. It is important to: • • • •

Check with your tutor that your name is on the tutor’s official tutorial roll Ensure that any note issued to you for attendance at another tutorial is given to your regular tutor. Check that if you transfer between tutorials during semester that your original tutor has arranged for tutorial marks to be transferred to your new tutor. Go to any tutorial during the week if you miss your regular tutorial due to illness and collect an irregular attendance form from the tutor. However, you can only do this twice during the semester.

Brief solutions to the pre-tutorial questions will be posted on the LMS. Solutions to the intutorial task will not be posted on the LMS. Students should take notes while working through the questions.

Using Lecture Capture Audio recordings of lectures delivered in this subject will be made available for review in the days following each lecture. Audio recordings of lectures allow you to revise lectures during the semester, or to review lectures in preparation for the end of semester exam. You can access recorded lectures by clicking on the Lecture Capture menu item in the LMS page for this subject. Please note that Lecture Capture recordings are not a substitute for attendance; rather they’re designed for revision. On rare occasions the Lecture Capture system can fail to record the lecture due to technical reasons. In such cases, the lecture recording will not be made available.

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Assessment Assessment Overview Your assessment for this subject comprises the following: Assessment Task

Due

Weighting

Macroeconomics Feedback Assessment Task I

Week 4

5%

Assignment 1

Week 6

10%

Assignment 2

Week 10

10%

Macroeconomics Feedback Assessment Task II

Week 11

5%

Participation in tutorials

Weekly

10%

End-of-semester exam

Assessment period

60%

Macroeconomics Feedback Assessment Tasks These are multiple choice test administered online through the LMS. You need to log on to the ‘Online Test’ site from the main menu between 9am, August 22 to 4pm, August 23 to complete the first task and between 9am, October 17 and 4pm, October 18 to complete the second task. There is a thirty-minute period for each task; you will be asked to complete fifteen questions. Assignments 1 and 2 These will be essay or short answer style tasks that may be submitted in groups of three people or less. The first assignment will be due at 4pm on Friday 6 September. The second assignment will be due 4pm on Friday 11 October. More detailed criteria regarding our expectations will be released along with the assignment themselves. Assignments will be submitted electronically. More details regarding submission of assignments will be provided later. End-of-semester exam The approved calculator for the exam is the Casio FX-82 (any suffix). More details regarding the final exam will be provided via the LMS and in lectures prior to the exam period. The exam period is from 4 November – 22 November. To pass the subject, students must pass the end of semester examination.

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Plagiarism and Collusion Presenting material from other sources without full acknowledgement (referred to as plagiarism) is heavily penalised. Penalties for plagiarism can include a mark of zero for the piece of assessment or a fail grade for the subject. Plagiarism is the presentation by a student of an assignment identified as his or her own work even though it has been copied in whole or in part from another student’s work, or from any other source (eg. published books, web-based materials or periodicals), without due acknowledgement in the text. Collusion is the presentation by a student of an assignment as his or her own work when it is, in fact, the result (in whole or in part) of unauthorised collaboration with another person or persons. Both the student presenting the assignment and the student(s) willingly supplying unauthorised material are considered participa...