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ECON311 – Macroeconomic Policy

2017 – S2 Day

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor
Natalia Ponomareva
Contact via natalia.ponomareva@mq.edu.au
E4A 428
Thursday 3-4
Credit points Credit points
3
Prerequisites Prerequisites
6cp at 200 level including (ECON201 or ECON204)
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description
This unit is concerned with the formulation and implementation of macroeconomic policy. Topics include: measurement of the business cycle, inflation targeting, monetary policy rules, the cash rate as the instrument of monetary policy in Australia and how it is set, the impact of economic shocks and the appropriate policy response in both a closed and open economy setting, economic bubbles and the stock and housing markets, the fiscal outlook and public debt and the role of technology and ideas in generating rising living standards. Short-run economic policy will be discussed in the framework of the AD-AS model with an interest rate rule. A version of Romer's model that emphasises the role of ideas is used to explain sustained rises in living standards.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at http://students.mq.edu.au/student_admin/enrolmentguide/academicdates/

Learning Outcomes

  1. Understand macroeconomic policy in a broad and general framework.
  2. Understand how the current settings of monetary and fiscal policy were determined in the context of the current economic environment, evaluate the effectiveness of these policies in achieving stated economic outcomes and be able to participate to the economic policy debate in an informed way.
  3. Source and use macroeconomic data.
  4. Discuss issues in an analytical framework with reference to economic data.
  5. Formulate macroeconomic policy in the context of Australia as a small open economy with the rest of the world.

General Assessment Information

NOTE

To pass this unit, you do not need to pass each component of assessment. Your final

score is a weighted average of all components.

Assessment Tasks

Name Weighting Due
Class test 30% Week 7
Assignment 20% Week 9
Final Examination 50% University Examination Period

Class test

Due: Week 7
Weighting: 30%

The class test exam is one 1 hour 20 minutes plus 10 minutes reading time. It will be based primarily on the exercises covered in the last hour of lectures presented from weeks 1 to 6.

No material is allowed in the exam except for a non-programmable calculator.

No extensions will be granted. Students who miss the class test and are granted disruption to studies will have to sit a supplementary test (the supplementary test may be oral).


This Assessment Task relates to the following Learning Outcomes:
  • Understand macroeconomic policy in a broad and general framework.
  • Understand how the current settings of monetary and fiscal policy were determined in the context of the current economic environment, evaluate the effectiveness of these policies in achieving stated economic outcomes and be able to participate to the economic policy debate in an informed way.
  • Discuss issues in an analytical framework with reference to economic data.
  • Formulate macroeconomic policy in the context of Australia as a small open economy with the rest of the world.

Assignment

Due: Week 9
Weighting: 20%

Description: Provide a short answer to questions either of an analytical nature and/or based on Australian data.     

Provide a clear analytical framework in which to express your answers. You may need to reference Australian data. You do not need to provide an extensive list of references in your answers.

 Submission: Submit to turnitin. Keep a copy of your assignment.  The submission date will be announced on iLearn and in class. 

Penalties: No extensions will be granted. There will be a deduction of 10% of the total available marks made from the total awarded mark for each 24 hour period or part thereof that the submission is late (for example, 25 hours late in submission – 20% penalty). This penalty does not apply for cases in which an application for disruption to studies is made and approved.

 

 


This Assessment Task relates to the following Learning Outcomes:
  • Understand macroeconomic policy in a broad and general framework.
  • Understand how the current settings of monetary and fiscal policy were determined in the context of the current economic environment, evaluate the effectiveness of these policies in achieving stated economic outcomes and be able to participate to the economic policy debate in an informed way.
  • Source and use macroeconomic data.
  • Discuss issues in an analytical framework with reference to economic data.
  • Formulate macroeconomic policy in the context of Australia as a small open economy with the rest of the world.

Final Examination

Due: University Examination Period
Weighting: 50%

Description: Two (2) hours (plus 10 minutes reading time)

To be held in the University Examination Period for Session 2, 2017.

The final exam will be based on lectures from Weeks 1 to 13 (inclusive) with an emphasis on material presented after the class test .

No material is allowed except for a non-programmable calculator.

There will be a supplementary final exam for students with approved disruption to studies.


This Assessment Task relates to the following Learning Outcomes:
  • Understand macroeconomic policy in a broad and general framework.
  • Understand how the current settings of monetary and fiscal policy were determined in the context of the current economic environment, evaluate the effectiveness of these policies in achieving stated economic outcomes and be able to participate to the economic policy debate in an informed way.
  • Discuss issues in an analytical framework with reference to economic data.
  • Formulate macroeconomic policy in the context of Australia as a small open economy with the rest of the world.

Delivery and Resources

Classes

There is one three-hour lecture per week. The timetable for classes can be found on the University web site at: http://www.timetables.mq.edu.au/

Prizes

VICTOR ARGY PRIZE FOR ECON311

This prize commemorates Victor Argy who was Professor of Economics at Macquarie University from 1973 until his death in 1993.  The prize, to the value of $350, is awarded for proficiency in ECON311 and is open to all candidates proceeding to the degree of Bachelor.

Required and Recommended Texts and/or Materials

The prescribed text for the unit is:

Jones, Charles I., Macroeconomics, Fourth  Edition, International Student Edition, Norton 2016.

Up-to-date commentaries and data on the Australian economy can be found in the following:

Reserve Bank of Australia, Bulletin, published monthly: http://www.rba.gov.au Department of the Treasury, Economic Roundup, AGPS, Canberra, published quarterly (available online at http://www.treasury.gov.au/)

Data relating to Australia and other countries are also available on the Internet. Useful sites include the following:

  • ABS Time Series Service: http://www.abs.gov.au
  • Budget Papers for Australia: http://www.treasury.gov.au/
  • Reserve Bank of Australia: http://www.rba.gov.au
  • National Bureau of Economic Research: http://www.nber.org/

Technology Used and Required

There are no special technology requirements in this unit.

Unit Web Page

Course material is available on the learning management system (iLearn).

The following information will be available on iLearn:

Unit Outline Announcements
Lecture slides and exercises Lecture exercises solutions
Information on Assessments Contact details
Consultation hours Other relevant material

You are strongly encouraged to regularly visit the website and use it as a resource centre to assist with your learning.

Unit Schedule

 

Week

Lecture

1

Trends and Cycles in Macroeconomic Data

2

Economic Shocks and Short-Run Fluctuations in Economic Activity

Contemporary Monetary Policy

The Operating Procedures of the Reserve Bank of Australia and Inflation Targeting

4

Stabilization Policy and the AS/AD Framework. Stabilization Policy and Taylor Rules

5

The Global Financial Crisis

6

Dynamic Stochastic General Equilibrium Models

7

Class Test

 

Mid-semester Break

8

 Consumption

9

 Fiscal Policy and Government Debt

Assignment Due 

10

Exchange Rate Regimes and Macroeconomic Policy

11 

Economic Growth I: Capital Accumulation and the Solow Growth Model

12

Economic Growth II: Determinants of Long-run Economic Growth: Romer’s Idea’s Model

13

Macroeconomic Policy: The Current Consensus and Unresolved Issues

Learning and Teaching Activities

Independent learning

Learning by doing (about 7 hours each teaching week and 10 hours each week during the 2-week mid-session recess). ECON311 relies heavily on independent learning where students read the relevant chapter and assigned journal articles, revise the lecture notes, prepare answers to the assigned questions covered in the last hour of the lecture and extend themselves by doing additional reading, questions, exercises, problems and sourcing macroeconomic data.

Lectures

This unit is taught in a three hour block as a lecture. However, part of the last hour of the lecture will be allocated to working through assigned questions either from the textbook or developed by the lecturer. The purpose of this is to reinforce the material covered in the lecture. At the end of each week, solutions to the assigned questions worked through in the last hour of that weeks lecture will be posted on the unit website. Lectures are intended to provide overviews of the conceptual framework and economic data that are critical to the core themes of the unit namely, the design and implementation of macroeconomic policy in Australia and elsewhere. Students are expected to read the relevant chapters and assigned readings before each lecture.

Policies and Procedures

Macquarie University policies and procedures are accessible from Policy Central. Students should be aware of the following policies in particular with regard to Learning and Teaching:

Academic Honesty Policy http://mq.edu.au/policy/docs/academic_honesty/policy.html

Assessment Policy http://mq.edu.au/policy/docs/assessment/policy_2016.html

Grade Appeal Policy http://mq.edu.au/policy/docs/gradeappeal/policy.html

Complaint Management Procedure for Students and Members of the Public http://www.mq.edu.au/policy/docs/complaint_management/procedure.html​

Disruption to Studies Policy http://www.mq.edu.au/policy/docs/disruption_studies/policy.html The Disruption to Studies Policy is effective from March 3 2014 and replaces the Special Consideration Policy.

In addition, a number of other policies can be found in the Learning and Teaching Category of Policy Central.

Student Code of Conduct

Macquarie University students have a responsibility to be familiar with the Student Code of Conduct: https://students.mq.edu.au/support/student_conduct/

Results

Results shown in iLearn, or released directly by your Unit Convenor, are not confirmed as they are subject to final approval by the University. Once approved, final results will be sent to your student email address and will be made available in eStudent. For more information visit ask.mq.edu.au.

Student Support

Macquarie University provides a range of support services for students. For details, visit http://students.mq.edu.au/support/

Learning Skills

Learning Skills (mq.edu.au/learningskills) provides academic writing resources and study strategies to improve your marks and take control of your study.

Student Enquiry Service

For all student enquiries, visit Student Connect at ask.mq.edu.au

Equity Support

Students with a disability are encouraged to contact the Disability Service who can provide appropriate help with any issues that arise during their studies.

IT Help

For help with University computer systems and technology, visit http://www.mq.edu.au/about_us/offices_and_units/information_technology/help/

When using the University's IT, you must adhere to the Acceptable Use of IT Resources Policy. The policy applies to all who connect to the MQ network including students.

Graduate Capabilities

Discipline Specific Knowledge and Skills

Our graduates will take with them the intellectual development, depth and breadth of knowledge, scholarly understanding, and specific subject content in their chosen fields to make them competent and confident in their subject or profession. They will be able to demonstrate, where relevant, professional technical competence and meet professional standards. They will be able to articulate the structure of knowledge of their discipline, be able to adapt discipline-specific knowledge to novel situations, and be able to contribute from their discipline to inter-disciplinary solutions to problems.

This graduate capability is supported by:

Learning outcomes

  • Understand macroeconomic policy in a broad and general framework.
  • Understand how the current settings of monetary and fiscal policy were determined in the context of the current economic environment, evaluate the effectiveness of these policies in achieving stated economic outcomes and be able to participate to the economic policy debate in an informed way.
  • Source and use macroeconomic data.
  • Formulate macroeconomic policy in the context of Australia as a small open economy with the rest of the world.

Assessment tasks

  • Class test
  • Assignment
  • Final Examination

Critical, Analytical and Integrative Thinking

We want our graduates to be capable of reasoning, questioning and analysing, and to integrate and synthesise learning and knowledge from a range of sources and environments; to be able to critique constraints, assumptions and limitations; to be able to think independently and systemically in relation to scholarly activity, in the workplace, and in the world. We want them to have a level of scientific and information technology literacy.

This graduate capability is supported by:

Learning outcomes

  • Understand macroeconomic policy in a broad and general framework.
  • Understand how the current settings of monetary and fiscal policy were determined in the context of the current economic environment, evaluate the effectiveness of these policies in achieving stated economic outcomes and be able to participate to the economic policy debate in an informed way.
  • Discuss issues in an analytical framework with reference to economic data.
  • Formulate macroeconomic policy in the context of Australia as a small open economy with the rest of the world.

Assessment tasks

  • Assignment
  • Final Examination

Problem Solving and Research Capability

Our graduates should be capable of researching; of analysing, and interpreting and assessing data and information in various forms; of drawing connections across fields of knowledge; and they should be able to relate their knowledge to complex situations at work or in the world, in order to diagnose and solve problems. We want them to have the confidence to take the initiative in doing so, within an awareness of their own limitations.

This graduate capability is supported by:

Learning outcomes

  • Understand macroeconomic policy in a broad and general framework.
  • Understand how the current settings of monetary and fiscal policy were determined in the context of the current economic environment, evaluate the effectiveness of these policies in achieving stated economic outcomes and be able to participate to the economic policy debate in an informed way.
  • Source and use macroeconomic data.
  • Discuss issues in an analytical framework with reference to economic data.
  • Formulate macroeconomic policy in the context of Australia as a small open economy with the rest of the world.

Assessment tasks

  • Class test
  • Assignment
  • Final Examination

Research and Practice

This unit gives you practice in applying research findings in your assignment and provides you with the background to conduct your own research.