Topic 1 Introduction; a brief look at global conditions with a focus on Australia’s recent performance; output and business cycles, inflation, unemployment.
B&S Chs 1, 2
RBA Statement on Monetary Policy (May 2021), https://www.rba.gov.au/publications/smp/2021/may/pdf/statement-on-monetary-policy-2021-05.pdf
Kellie Belrose "Bridging the Textbook Gaps on How the RBA Implements Monetary Policy" https://www.rba.gov.au/education/resources/teacher-updates/pdf/bridging-the-textbook-gaps-on-how-the-rba-implements-monetary-policy.pdf
Topic 2 The IS-LM model: Short-run goods market and money market equilibrium; monetary policy & fiscal policy; the policy mix – comparing a money supply rule with an interest rate rule.
B&S Chs 3, 4, 5
Reserve Bank of Australia “Monetary Policy” http://www.rba.gov.au/monetary-policy/index.html
David Romer (2000), Keynesian Macroeconomics Without the LM Curve, Journal of Economic Perspectives, Spring, pp 149-169
Topic 3 The labour market; wage and price setting in the medium run; the natural rate of unemployment; tax distortions and full employment.
B&S Ch 6
Mark Chambers et al (2021) " Underemployment in the Australian Labour Market", https://www.rba.gov.au/publications/bulletin/2021/jun/pdf/underemployment-in-the-australian-labour-market.pdf
Christopher Kent (2014) "Cyclical and Structural Changes in the Labour Market" http://www.rba.gov.au/speeches/2014/sp-ag-160614.html
Topic 4 The AS-AD model: All markets together from the short run to the medium run; aggregate supply; aggregate demand with a fixed money supply and with an interest rate rule using an INFLATION TARGET; monetary, fiscal and oil price shocks in the AS-AD model.
B&S Ch 7
RBA Explainer: Australia's inflation target, https://www.rba.gov.au/education/resources/explainers/australias-inflation-target.html
Guy Debelle, "Monetary policy during Covid", (2021) https://www.rba.gov.au/speeches/2021/sp-dg-2021-05-06.html
Callum Hudson et al (2021) "The Global Fiscal Response to COVID-19", https://www.rba.gov.au/publications/bulletin/2021/jun/pdf/the-global-fiscal-response-to-covid-19.pdf
Topic 5 Evolution of the Phillips curve; theories of expected inflation; the sacrifice ratio
B&S Ch 8
Heather Ruberl et al (2021) "Estimating the NAIRU in Australia", https://treasury.gov.au/sites/default/files/2021-05/p2021-164397_nairu.pdf
Topic 6 The macroeconomics of financial market crises.
B&S Ch 9
Luci Ellis (2009) “The Global Financial Crisis: Causes, Consequences and Countermeasures”, RBA Bulletin, May 2009 http://www.rba.gov.au/PublicationsAndResearch/Bulletin/bu_may09/Pdf/bu_0509_4.pdf
Jonathan Kearns (2020), "Banking and the COVID-19 Pandemic", https://www.rba.gov.au/speeches/2020/pdf/sp-so-2020-12-15.pdf
Topic 7 The Long run: Sources and theories of economic growth and productivity; convergence across countries - PPP comparisons; growth over 2000 years; savings and capital accumulation; the golden rule savings rate
B&S Chs 10, 11
P. Romer (1994) “The Origins of Endogenous Growth”, Journal of Economic Perspectives, Winter 1994
Australian Treasury (2021) "Intergeneration Report: Australia over the next 40 years", https://treasury.gov.au/sites/default/files/2021-06/p2021_182464.pdf
Topic 8 Technology, population growth and the Solow model; institutions, technological progress and growth
B&S Chs 12, 13
R Gordon (2000) “Does the ‘New Economy’ Measure up to the Great Inventions of the Past?” Journal of Economic Perspectives, Fall 2000
Topic 9 Expectations - expected presented discounted value; nominal vs real interest rates; interest rates and monetary policy; the Fisher hypothesis; macroeconomic determinants of the yield curve or term structure; and of stock market prices; housing prices; expectations and consumption & investment; Tobin’s q; expectations and the IS-LM model.
B&S Chs 14, 15, 16, 17
Topic 10 The exchange rate; nominal & real, bilateral & multilateral exchange rates; the balance of payments; interest parity condition; the goods market in an open economy; exchange rates and net exports; J-curve; saving, investment and the trade balance.
B&S Chs 18, 19
Tim Atkin et al (2021) "Determinants of the Australian Dollar Over Recent Years", https://www.rba.gov.au/publications/bulletin/2021/mar/pdf/determinants-of-the-australian-dollar-over-recent-years.pdf
Topic 11 The Mundell-Fleming model under floating exchange rates (with interest rate setting and inflation targeting); fixed exchange rates and exchange rate crises; exchange rate overshooting; choosing the exchange rate regime.
B&S Chs 20, 21
Topic 12 Back to Policy: Uncertainty and macro policy; credibility of policy-makers; fiscal policy and government budget constraint, government debt; challenges from the crisis - the liquidity trap, macroprudential policy.
B&S Chs 22, 23, 24