316-201 Intermediate Macroeconomics SUBJECT GUIDE Semester 2, 2008 Prepared by Ólan Henry Department of Economics Faculty of Economics and Commerce
Contents Contents... 2 Subject Outline... 3 Introduction... 3 Subject Aims... 3 Prerequisites... 3 Learning Outcomes... 4 Subject Objectives... 4 Generic Skills... 4 Awareness Issues... 4 Contact Details... 5 Lecturer Contact Details... 5 Tutor Contact Details... 5 Email Protocol... 5 Textbook... 6 Alternative Texts... 6 Lectures and Tutorials... 7 Lecture Times... 7 Maths and Graphs... 7 Lecture Schedule... 7 Enrolling in Tutorials Using Alloc8... 9 Audio Recordings... 9 Assessment... 10 Assessment Overview... 10 Using the Assignment Tool... 11 Plagiarism and Collusion... 11 Late Submission... 12 Special Consideration... 12 Referencing... 12 Further Assistance... 13 Lecturer Consultations... 13 Tutor Consultations... 13 Pit-Stop Tutorials... 13 Online Tutor... 13 Teaching & Learning Unit... 14 2
Subject Outline Introduction Welcome to Intermediate Macroeconomics. This subject builds on the material you studied in 316-101 Introductory Macroeconomics. The goal of this subject is to provide you with a deeper understanding of Macroeconomics. While this subject has an Australasian focus, we will maintain contact with economic events around the world. The core of the syllabus is a model founded on equilibrium conditions for three markets; the goods markets, the labour markets and the financial markets. The skills you will develop in this subject will be useful in the other subjects (and indeed the other disciplines) which you will study at the University of Melbourne. Furthermore, these skills also have a practical use in the workplace. Some of the issues we will cover will draw upon current research, issues that do not yet appear in current textbooks. This is, of course, an advantage of attending a research-oriented University. We think you will find this subject to be intellectually challenging, relevant to issues that are of current concern and, above all, enjoyable and interesting. Subject Aims Intermediate macroeconomic analysis develops the tools, skills and knowledge base necessary to operate as a practicing macroeconomist. These may include: models of long run economic growth; an assessment of the evidence on economic growth and its implications; the flexible-price macroeconomic model in which markets continuously clear; an assessment of the evidence regarding whether prices and wages are flexible or sticky; the sticky price macroeconomic model in which markets do not always clear; assessment of the flexible and sticky price models; the analysis of macroeconomic policy making. Prerequisites 316-101 Introductory Macroeconomics and 316-102 Introductory Microeconomics. Students who do not have these prerequisite subjects will not normally be allowed to enrol in 316-201. If you do not have these prerequisite subjects, but believe that you should be allowed to participate in this subject you should contact the subject coordinator immediately. 3
Learning Outcomes Subject Objectives The principal objective of intermediate macroeconomics is for students to become fluent in the subject matter and methods of intermediate macroeconomics. The concept of fluency is useful because Economics is like a language. People who are fluent in a language are able to communicate ideas rapidly and efficiently and to analyse economic issues and solve problems. Economists make frequent use of graphs and mathematics to convey complex ideas that would take much longer to explain precisely in words. These tools are an important component of any subject in economics. Generic Skills In this subject you will have the opportunity to develop important generic skills. These include: High level of development: written communication; collaborative learning; problem solving; team work; application of theory to practice; critical thinking; synthesis of data and other information; evaluation of data and other information. Moderate level of development: oral communication; interpretation and analysis; accessing data and other information from a range of sources; receptiveness to alternative ideas. Some level of development: statistical reasoning; use of computer software. Awareness Issues At a broader level, studying this subject will increase your awareness of issues such as the foundations of economic growth, the sources and consequences of macroeconomic fluctuations, and the international linkages between economies. 4
Contact Details Lecturer Contact Details The coordinator for 316-201 Intermediate Macroeconomics is Associate Professor Ólan Henry. Email: oth@unimelb.edu.au Room: 526, Economics and Commerce Building Phone: 8344-5312 Consultation Hours: Tuesday and Thursday 10-11:00 Tutor Contact Details The coordinator of the tutorial program is Ms Nahid Khan Email: n.khan@unimelb.edu.au Room: 606, Economics & Commerce Building Phone: 8344 3621 Consultation Hours: Tuesday and Thursday 11-12pm Email Protocol While academic staff endeavor to address queries received via email, it is more appropriate to resolve substantive questions face-to-face during normal consultation hours. With this in mind, we encourage all students to familiarize themselves with the consultation hours offered by lecturers and tutors in this subject. 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/. 5
Textbook Olivier Blanchard and Jeffrey Sheen, Macroeconomics: Australasian edition, (Second Edition) Pearson Education Australia, 2007, UniM Baill Res 339 BLAN Copies of the text are in the University Bookroom. A small number of copies are in the library but I would urge you to purchase a copy. I will be making extensive use of it and quotes from the book may figure in tutorial and/or exam questions. Alternative Texts A number of other textbooks on Intermediate Macroeconomics are available in the library which also provide explanations of the material covered in this subject. Some students may find these authors more to their liking than the set text. All students are encouraged to at least browse different books in order to test their understanding of the material and for information on a wider range of applications and approaches to macroeconomics. Some of the particularly relevant texts include: R. Dornbusch et al, Macroeconomics 2 nd ed, McGraw-Hill Education Australia, 2006. UniM Baill Res 339MACR J. Bradford DeLong, Macroeconomics, McGraw-Hill Irwin, 2002. UniM Baill Res 339 DELO and UniM ECO 339 DELO Robert J. Barro, Macroeconomics: a modern approach, Thomson South-Western, 2008 UniM Baill Res 339 BARR and UniM ECO 339 BARR N. Gregory Mankiw, Macroeconomics, Worth Publishers, 2007. UniM ECO 339 MANK 6
Lectures and Tutorials Lecture Times All lectures are in the Sunderland Theatre in the Medical Building. Tuesday 9:00am - 10:00am repeated 3:15pm - 4:15pm Thursday 9:00am - 10:00am repeated 3:15pm - 4:15pm Maths and Graphs Maths and Graphs will be used in lectures and tutorials. The mathematics involved will be little more than the manipulation of common equations used in macroeconomics. The (often repetitive) ways in which they will be manipulated are themselves be part of the tool-kit of any macroeconomist. It is my job to provide you with clear explanations and examples of the methods used. Lecture Schedule Lecture Topic Lecture title Further Reading 1 Introduction to Intermediate Macroeconomics 2 THE SHORT RUN The Determinants of Equilibrium Output Chapters 1 and 2 Sections 3.1-3.3 3 Investment and Saving Sections 3.3-3.5 4 Financial Markets and Money Sections 4.1-4.4 5 The IS-LM Model I Sections 5.1-5.2 6 The IS-LM Model II Sections 5.3-5.4 7 The IS-LM Model III Sections 5.4. -5.5 8 THE MEDIUM RUN The Labour Market II Sections 6.4-6.6 and the 7
Appendix to Chapter 6 9 The AS-AD Model I Sections 7.1. -7.3 10 The AS-AD Model II Sections 7.4-7.7 11 The Natural Rate of Unemployment and the Phillips Curve 12 Inflation and Economic Activity I 13 Inflation and Economic Activity II Sections 8.1. -8.3 Sections 9.1. -9.3 Sections 9.3. -9.5 14 THE LONG RUN Growth Sections 10.1-10.3 15 Savings, Capital accumulation and Output 16 Technological Progress and Growth 17 Technological Progress, Wages and Unemployment Sections 11.1-11.4 Sections 12.1-12.4 Sections 13.1-13.4 18 EXPECTATIONS Expectations Sections 14.1 14.4 19 Financial markets and Expectations 20 Expectations, Output and Policy Sections 15.1. -15.3 Sections 17.1 17.3 21 THE OPEN ECONOMY Openness in Goods and Financial Markets Sections 18.1. -18.3, 19.1-19.4, 19.6 22 Output, the interest rate and the exchange rate Sections 20.1 20.5 8
23 Exchange Rate Regimes Sections 21.1-21.4 24 Summing Up Enrolling in Tutorials Using Alloc8 Alloc8 is the University s online tutorial allocation system. You must enrol in a tutorial for this subject using Alloc8 by 8 th August. Late enrolment into tutorials is handled by the Economics & Commerce Undergraduate Student Centre. More information about Alloc8, including cut-off dates and a link to the login page, can be found on the Faculty s website: http://www.ecom.unimelb.edu.au/students/undergrad/alloc.html Any difficulties with respect to the Tutorial to which you will have been allocated should be taken up with Tutorial Co-ordinator, Ms Nahid Khan (Rm: 606, Tel.: 8344 3621, e-mail: n.khan@unimelb.edu.au) and not with your Tutor. It should be noted that once you have (finally) been allocated to a particular Tutorial, then that is the only Tutorial which you should attend. Shopping around is not allowed because of the constraints on numbers of Tutorials and numbers of students allowed per Tutorial. Note that marks are allocated to you for tutorial participation will be for the tutorial as recorded in the Alloc8 system if you are not in the correct tutorial then you cannot receive any marks. Tutorials are an integral and important part of the subject. They will be used both to complement and to supplement the lectures and the reading material. The tutorials will follow closely the system you are familiar with from other subjects with Blue sheets (containing a reading guide, a set of key concepts to be understood and work to be done before the tutorial) which will be distributed at the preceding tutorial and Pink sheets (containing tasks to be done in the tutorial) being distributed each week in the tutorials. I would urge you to do the tutorial preparation in your tutorial groups. But, whether you do or not, we will work with the rule that if you do not prepare for the tutorial then you don't go to the tutorial. Exam questions will largely be based on (i.e. they will be modifications, extensions and/or combinations of) the questions on the Blue and Pink Tutorial sheets. Audio Recordings An audio recording 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 9
revise lectures during the semester, or to review lectures in preparation for the end of semester exam. To download the audio recordings as mp3 files automatically, students should subscribe to the 316-201 Semester 2 2008 podcast at: http://www.economics.unimelb.edu.au/subject_pages/2008/semester2/316-201/audio/316-201podcast.rss Alternatively, the mp3 files can be downloaded manually from the lecture audio page in the LMS for 316-201. Please note that the recordings are not a substitute for attendance; rather they re designed for revision. On occasion a recording can fail, usually due to technical reasons. In such cases, the lecture recording will not be made available. Assessment Assessment Overview Assessment Task Due Weighting Multiple Choice Test 9am, 25 th 2pm, 29 th August 5% Assignment 1 14:00 Monday September 15 th 12% Assignment 2 14:00 Monday October 13 th 13% Participation in tutorials Weekly 10% End-of-semester exam Examination period 60% The handbook entry for the subject dictates the assessment. It reads A 2-hour end of semester examination (60%), a multiple choice test (5%), two assignments totalling not more than 2500 words (25%), tutorial attendance and participation (10%). Tutorial attendance and participation (10 marks): This starts from the second tutorial. Please note that attendance gives you the chance to earn marks. Tutorial marks will be allocated as follows: 5 marks for participation based on preparation, actively participating in tutorial work, relevance and logic in discussion, and appreciative listening to other students contributions: 5 marks for attendance, with full marks if you miss no more than 2 tutorials and you lose a half mark per extra tutorial missed. 10
Multiple Choice Test (5 marks): The multiple choice test will take the form of a feedback exam and will be administered electronically between 25 th and 29 th August 2008. It will cover the first and second topics in the broad lecture outline. Assignments (25 marks): There will be two assignments, one worth 12 marks and one worth 13 marks. The first assignment will be due on 15th of September and the second on the 12th of October. Like the tutorial questions, the assignment questions will also be practice exam questions.. All members of a group submitting a single assignment must belong to the same tutorial and all members of the group will be given the same mark. No more than four students may make up a group. Students may choose to work and hand in an assignment on their own but I advise against it. Note that no two groups may hand in the same assignment. Final Exam (60 marks): The final exam accounts for 60 marks. It will be a mix of multiple choice questions (20 marks) and essay questions (40 marks). Exam questions will largely be based on (i.e. they will be modifications, extensions and/or combinations of) the questions on the Blue and Pink Tutorial sheets. There will be little covered in tutorials which will not be examined. Another way to put this is to say that the tutorial questions will all be practice examination questions. Using the Assignment Tool The Assignment Tool allows you to submit your essay to your lecturer online from home or from any of the student labs on campus. You will be asked to submit your essay in electronic format into the Assignment Tool. You can access the Assignment Tool by clicking on Assignment Tool in the navigation menu from the LMS page for this subject. Further instructions on using the Assignment Tool can be found here: http://tlu.ecom.unimelb.edu.au/students/elearning/assignment_tool.html 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 participants in the act of academic misconduct. 11
If you are in doubt about any of these matters please see http://www.services.unimelb.edu.au/plagiarism/plagiarism.html for more information. The Teaching and Learning Unit has developed a web-based Academic Honesty Module that allows you to learn more about and test your knowledge of plagiarism and collusion. You are strongly encouraged to complete this module, which can be accessed at: http://tlu.ecom.unimelb.edu.au/academichonestytest/index.cfm Late Submission Late submissions must be accompanied by a completed Request for Special Consideration form. The form must be handed to the Undergraduate Student Centre. Late assignments, where approval for late submission has not been given, will be penalised at the rate of 10% of the total mark per day, or part thereof, for up to 10 days, at which time a mark of zero will be given. Special Consideration Students who have been significantly affected by illness or other serious circumstances during the semester may be eligible to apply for Special Consideration. The following website contains detailed information relating to who can apply for Special Consideration and the process for making an application: http://www.ecom.unimelb.edu.au/students/special/ You should not approach the lecturer or tutors of this subject about special consideration. Referencing All sources used for a written piece of assessment must be referenced. This is to acknowledge that your material is not based entirely on your own ideas, but is based, in part, on the ideas, information, and evidence of others. This is desirable as you are attending University in order to learn from others. You will be required to use the APA system or Harvard System of referencing. The TLU has prepared a booklet for each system specifically to assist students to reference correctly. Each booklet contains many examples that will help you when preparing your assignments. The booklets can be found here: http://tlu.ecom.unimelb.edu.au/pdfs/apastyle.pdf and http://tlu.ecom.unimelb.edu.au/pdfs/the_harvard_system.pdf 12
It is important that all material you present for assessment is referenced correctly. Material that has not been referenced correctly may be considered to be plagiarised, and as such may be penalised. We will also look for evidence that material included in the bibliography has been used in the assignment. Including references that have not been used may also result in your assignment being penalised. Further Assistance If you need assistance during the semester, you have several options: Lecturer Consultations Tuesday and Thursday 10-11:00 Tutor Consultations These times are to be confirmed. Your tutor will provide you with details of his/her consultation hours. Pit-Stop Tutorials In addition to the regular Tutorial time to which you will have been allocated, there will be a number of Pit Stop Tutorials which will be held from the week beginning 11 August at the following days and times in Room 217, Babel Building: Tuesdays 1-2pm Thursdays 2.15-3.15pm Online Tutor The Online Tutor allows you to direct questions to your tutor/lecturer via the LMS. The Online Tutor can be accessed 24 hours a day, 7 days a week. Tutors will attempt to answer your question within 24 hours (weekdays only). Your questions and the tutor s answers can be accessed by all students in the subject, allowing everyone to benefit from the question and answer. Importantly, your identity will not be revealed to other students. Even if you don t want to ask a question, you can still view existing questions and answers. Please note that the On-line Tutor is there to provide support to students who have tried their best to understand a point in the lectures or the textbook but who are still not satisfied with their own level of understanding. Detailed answers will not be provided about questions contained in upcoming Tutorials. Also note that the Online Tutor is not designed to replace attendance at tutorials, but rather to complement the tutorial process. Also, simple questions that can be answered by referring to the prescribed readings will not usually be answered. You 13
can access the Online Tutor via the Online Tutor link, located in the navigation menu of this subject s LMS page. Teaching & Learning Unit The Teaching and Learning Unit offers a wide range of support services to students. If you are having any difficulty in studying for this subject you could arrange a consultation with the Unit s learning skills specialist. The learning skills specialist can review your current approaches to study and offer advice on how to adjust to the demands of tertiary study. If you are a student from a non-english speaking background there is an English as a Second Language specialist who is available to help with your written work. Both of these specialists are available for face-to-face consultations or electronically through email. Go to the Faculty office to arrange for consultations or contact the specialists electronically through the Teaching and Learning Unit web page. The web page also contains a wide variety of study skills topics and information sheets for students, and a timetable of up-coming events, including focussed workshops, designed to support Economics and Commerce students in their study. The Teaching and Learning Unit is located on the 2 nd floor of the Babel Building. Please visit the TLU s website http://tlu.ecom.unimelb.edu.au/. Make use of the Teaching and Learning Unit. It is there to help. 14