ECON3011 – Macroeconomic Policy

2022 – Session 1, Online-scheduled-weekday

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor
Jeffrey Sheen
Room 432, E4A Building
Thursdays 3-5pm
Guest Lecturer
David Orsmond
Credit points Credit points
Prerequisites Prerequisites
20cp at 2000 level including ECON204 or ECON2004
Corequisites Corequisites
Co-badged status Co-badged status
Unit description Unit description

This unit develops macroeconomic models with a focus on key contemporary issues such as persistent low inflation, interest rates, secular stagnation, alternative monetary policy frameworks, fiscal policy constraints, understanding financial crises, financial regulation and cryptocurrencies. Students will develop an understanding of the reasons for these problems, and how key policy institutions such as the RBA, APRA and Treasury are addressing them.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at

Learning Outcomes

On successful completion of this unit, you will be able to:

  • ULO1: Analyse and explain macroeconomic policy in a general framework.
  • ULO2: Appraise how monetary and fiscal policies are determined in the context of the current economic environment.
  • ULO3: Critically evaluate the effectiveness of current macroeconomic policy in achieving stated goals.

General Assessment Information

Essay Assignment (20%)

  • Due online in iLearn through TURNITIN before Friday midnight of Week 12,
  • Choose any one of the topics on contemporary issues (provided separately on iLearn).
  • Research it widely in journal, books, professional magazines etc, and write a reasoned essay about the issue and its implications for macroeconomic outcomes and policy.
  • Format: Maximum 1500 words. You may use any number of figures and diagrams and tables. Use 12 point font, 1.5 line spaces and A4 page size.
  • It is essential to cite any writing that is not your own – remember the essays will be submitted online on iLearn through TURNITIN, which can detect copied material from anywhere at any time globally.
  • NB Possible topics will be provided in iLearn.


Mid-session Test (25%)

  • Held online in-class in Week 7
  • Weighting: 25%
  • Details of the mid-semester test will be discussed in Week 6.


Final examination (50%)

  • In examination week (June)
  • Weighting: 50%
  • The end-of-session exam will be online. Details of the exam will be discussed in Week 13.



Late submissions of assessments

Unless a Special Consideration request has been submitted and approved, no extensions will be granted. There will be a deduction of 10% of the total available assessment-task marks made from the total awarded mark for each 24-hour period or part thereof that the submission is late. Late submissions will only be accepted up to 96 hours after the due date and time.

No late submissions will be accepted for timed assessments – e.g., quizzes, online tests.

Table 1: Penalty calculation based on submission time

Submission time after the due date (including weekends)

Penalty (% of available assessment task mark)

Example: for a non-timed assessment task marked out of 30

<24 hours


10% x 30 marks = 3-mark deduction

24-48 hours


20% x 30 marks = 6-mark deduction

48-72 hours


30% x 30 marks = 9-mark deduction

72 – 96 hours


40% x 30 marks = 12-mark deduction

>96 hours


Assignment won’t be accepted


Special Consideration

To request an extension on the due date/time for a timed or non-timed assessment task, you must submit a Special Consideration application. An application for Special Consideration does not guarantee approval.

The approved extension date for a student becomes the new due date for that student. The late submission penalties above then apply as of the new due date


Assessment Tasks

Name Weighting Hurdle Due
Mid-session class test 25% No Week 7
Essay assignment 20% No Week 13
Participation 5% No In Zoom sessions
Final examination 50% No In final examination period

Mid-session class test

Assessment Type 1: Quiz/Test
Indicative Time on Task 2: 15 hours
Due: Week 7
Weighting: 25%


The 80 minute online class test will be based on the lecture material and exercises covered in weeks 1 to 6.


On successful completion you will be able to:
  • Analyse and explain macroeconomic policy in a general framework.
  • Appraise how monetary and fiscal policies are determined in the context of the current economic environment.

Essay assignment

Assessment Type 1: Report
Indicative Time on Task 2: 20 hours
Due: Week 13
Weighting: 20%


Provide an answer to questions of an analytical nature and/or write a short essay/report which might require the use of Australian data.


On successful completion you will be able to:
  • Appraise how monetary and fiscal policies are determined in the context of the current economic environment.
  • Critically evaluate the effectiveness of current macroeconomic policy in achieving stated goals.


Assessment Type 1: Participatory task
Indicative Time on Task 2: 0 hours
Due: In Zoom sessions
Weighting: 5%


Students are expected to participate in live seminars and the forum


On successful completion you will be able to:
  • Analyse and explain macroeconomic policy in a general framework.
  • Appraise how monetary and fiscal policies are determined in the context of the current economic environment.

Final examination

Assessment Type 1: Examination
Indicative Time on Task 2: 35 hours
Due: In final examination period
Weighting: 50%


A two-hour open book examination will be held during the University Examination Period, and will be on based on material covered in lectures from weeks 1 to 13 (inclusive), with an emphasis on material presented after the class test.


On successful completion you will be able to:
  • Appraise how monetary and fiscal policies are determined in the context of the current economic environment.
  • Critically evaluate the effectiveness of current macroeconomic policy in achieving stated goals.

1 If you need help with your assignment, please contact:

  • the academic teaching staff in your unit for guidance in understanding or completing this type of assessment
  • the Writing Centre for academic skills support.

2 Indicative time-on-task is an estimate of the time required for completion of the assessment task and is subject to individual variation

Delivery and Resources


Lectures are formally on Thursdays 5-7pm online. The first segment is a recorded lecture, while the second segment will begin at 5::30pm as an interactive ZOOM session in which you are expected to participate.


Required and Recommended Texts and/or Materials

There is no required textbook for this course.

It is assumed that you understand well an intermediate macroeconomics textbook  eg

               O. Blanchard and J. Sheen, Macroeconomics, 2014, 4th edition, Pearson (

A good reference text for this unit is:

                S. Williamson, Macroeconomics , 2018, 6th global edition, Pearson (

Useful readings for the topics are given in the Unit Schedule, and extra readings may be recommended during the lectures.


Unit Schedule

WEEKS 1-2 (24 February, 3 March).  Refresher on ISLM, AS-AD; Malthusian growth model, Solow growth model, Endogenous growth models (JS)

Blanchard and Sheen 2013 Chs 5-12

McLeay,M. Radia, A and Thomas R. 2914 Money creation in the modern economy. Bank of England Quarterly Bulletin Q1 2014

Williamson Chs 1,-3, 7-8


WEEK 3 (10 March). Low inflation, the natural rate of unemployment (JS)

Blanchard, O. 2018 Should we reject the natural rate hypothesis? Journal of Economic Perspectives, Vol 32, 1 Winter 2018

Cassidy, N., Rankin,E., Read, M. and Seibold,C. 2019 Explaining Low Inflation Using Models.

Williamson Chs 14-15


WEEK 4 (17 March). Secular stagnation, potential growth, technology and inequality (JS)

Arsov, I and Watson, B. 2019 Potential Growth in Advanced Economies RBA Bulletin 12

December 2019

Gordon, R. 2014 US Economic Growth is Over: The Short Run Meets the Long Run, Think Tank 20: Growth, Convergence and Income Distribution: The Road from the Brisbane G-20 Summit:

PIIE 2020  How to Fix Economic Inequality? An Overview of Policies for the United States and Other High-Income Economies. (


WEEK 5 (24 March). Monetary policy frameworks – inflation targeting and alternatives (JS)

Debelle, G. 2018 Twenty-five Years of Inflation Targeting in Australia. RBA Conference, Central Bank Frameworks: Evolution or Revolution? 2018

Rogoff, K. 2017. Dealing with monetary paralysis at the zero bound. Journal of Economic Perspectives, dealing_with_monetary_paralysis_at_the_zero_bound.pdf

RBA Explainer - Unconventional monetary policy

Williamson Ch 15

WEEK 6 (31 March). Links between fiscal policy and monetary policy – the government budget constraint, the fiscal theory of prices, hyperinflation (JS)

Blanchard and Sheen 2013 Chs 23-24

Blanchard, O. (2019) Public Debt and Low Interest Rates, American Economic Review,

Blanchard, O. (2021) Fiscal  Policy under Low Interest Rates  Draft text:

Cochrane, J. (2022) The Fiscal Theory of the Price Level  Draft text:


WEEK 7 (7 April). Mid-session test - online 5pm.

..Mid-session break...


WEEK 8 (28 April). The causes of financial crises and policy responses (DO)

Reinhart, C. and K. Rogoff (2008), This Time is Different: Eight Centuries of Financial Folly, NBER Paper 13882, March

RBA Explainer: The Global Financial Crisis,

Williamson Ch. 18


WEEK 9 (5 May). Financial regulation: Principles and practice (DO)

Yuksel, M. (2019), ‘A decade of post-crisis G20 financial sector reforms,’ RBA Bulletin, June

Orsmond. D. and F. Price (2016), ‘Macroprudential policy frameworks and tools,’ RBA Bulletin, December


WEEK 10 (12 May) Digital money and the payments system; the future of cryptocurrencies – eg Bitcoin, Libra, central bank digital currencies (JS)

Dark, C., Emery, D, Ma,J. and Noone, C. 2019 Cryptocurrency: Ten Years On. RBA Bulletin,

Kumar, A, Smith. C 2018 Crypto-currencies – An introduction to not-so-funny moneys, Journal of Economic Surveys 32,8

Härdle, W. and Harvey, C. and Reule, R., Understanding Cryptocurrencies (March 26, 2019).

Richards, T., Thompson, C., and Dark, C. Sep 2020.   Retail central bank digital currency - design considerations, rationales and implications. RBA Bulletin.

Williamson Chs 18  

WEEKS 11-12 (19 and 26 May). Official Australian and global economy reports (JS)

Latest RBA Statement on monetary policy, Commonwealth Budget statements, World Economic Outlook et al


WEEK 13 (2 June). Summary and overview, Q and A, discussion of final exam

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Academic Integrity

At Macquarie, we believe academic integrity – honesty, respect, trust, responsibility, fairness and courage – is at the core of learning, teaching and research. We recognise that meeting the expectations required to complete your assessments can be challenging. So, we offer you a range of resources and services to help you reach your potential, including free online writing and maths support, academic skills development and wellbeing consultations.

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Changes from Previous Offering

Unit has been changed to include much more on contemporary policy issues,