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ECON7013 – Applied Topics in Macroeconomics

2022 – Session 2, Online-scheduled-weekday

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Unit Convenor
Jeffrey Sheen
jeffrey.sheen@mq.edu.au
Contact via x7287
E4A 430
Lecturer
David Orsmond
david.orsmond@mq.edu.au
Credit points Credit points
10
Prerequisites Prerequisites
Admission to MRes
Corequisites Corequisites
Co-badged status Co-badged status
ECON713
Unit description Unit description

This unit provides the necessary tools to engage with current macroeconomic issues. It will apply rigorous economic analysis to real-world problems, developing an understanding about the relationships between key macroeconomic indicators e.g. inflation, output growth, unemployment, interest rates, wages and profits, stock market indices, exchange rates. The unit will help students to think creatively about the design and constraints of monetary, fiscal and macroprudential policy in normal times and during a crisis. In so doing students will develop the capacity to undertake independent research in macroeconomics.

Important Academic Dates

Information about important academic dates including deadlines for withdrawing from units are available at https://www.mq.edu.au/study/calendar-of-dates

Learning Outcomes

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

  • ULO1: Source and interpret macroeconomic data and coherently use the key concepts in macroeconomics.
  • ULO2: Apply advanced macroeconomic models to understand the behaviour of key macroeconomic variables.
  • ULO3: Identify and interpret topical macroeconomic issues, and use advanced macroeconomic models to understand how policy should respond to the issues.
  • ULO4: Co-operate with peers in groups to prepare and present the results of collaboration on current topical issues.

General Assessment Information

Essay topics, mid-session test question paper and final exam question paper will be available on iLearn.

Late Assessment Submission Penalty   

Unless an application for Special Consideration has been submitted and approved, a 5% penalty (of the total possible mark) will be applied each day a written assessment is not submitted, up until the 7th day (including weekends). After the 7th day, a grade of ‘0’ will be awarded even if the assessment is submitted. Submission time for all written assessments is set at 11.55pm. A 1-hour grace period is provided to students who experience a technical concern.   

 

For any late submissions of time-sensitive tasks, such as scheduled tests, exams, performance assessments, and/or scheduled practical assessments/labs, students need to submit an application for Special Consideration  

Assessment Tasks

Name Weighting Hurdle Due
Essay 25% No Week 12
Final examination 40% No In final exam period
Group Research and Presentation 15% No Week 13
Mid-session test 20% No Week 7

Essay

Assessment Type 1: Essay
Indicative Time on Task 2: 20 hours
Due: Week 12
Weighting: 25%

 

The 1,750-word essay is due before the beginning of the seminar in Week 12. Students choose any one of the topics on contemporary issues provided by the lecturer, conduct a literature review, and write a reasoned essay about the issue and its implications for macroeconomics. A significant weight in the marking will be placed on the literature review and research methodology used.

 
On successful completion you will be able to:
  • Source and interpret macroeconomic data and coherently use the key concepts in macroeconomics.
  • Apply advanced macroeconomic models to understand the behaviour of key macroeconomic variables.
  • Identify and interpret topical macroeconomic issues, and use advanced macroeconomic models to understand how policy should respond to the issues.

Final examination

Assessment Type 1: Examination
Indicative Time on Task 2: 40 hours
Due: In final exam period
Weighting: 40%

 

A two-hour examination will be held during the University Examination Period, and will be based on all topics and presentations covered in the unit in Weeks 1-13

 
On successful completion you will be able to:
  • Source and interpret macroeconomic data and coherently use the key concepts in macroeconomics.
  • Apply advanced macroeconomic models to understand the behaviour of key macroeconomic variables.
  • Identify and interpret topical macroeconomic issues, and use advanced macroeconomic models to understand how policy should respond to the issues.

Group Research and Presentation

Assessment Type 1: Presentation
Indicative Time on Task 2: 15 hours
Due: Week 13
Weighting: 15%

 

Each group will be allocated a current report by a major agency, such as the Reserve Bank, to be analysed and presented as a seminar towards the end of the session. Students are required to present a summary of the key points in the report. The group must meet regularly throughout the session to complete the necessary research on the allocated report, and to prepare the presentation. The presentation can be designed to include possible discussion points for the class.

 
On successful completion you will be able to:
  • Source and interpret macroeconomic data and coherently use the key concepts in macroeconomics.
  • Apply advanced macroeconomic models to understand the behaviour of key macroeconomic variables.
  • Identify and interpret topical macroeconomic issues, and use advanced macroeconomic models to understand how policy should respond to the issues.
  • Co-operate with peers in groups to prepare and present the results of collaboration on current topical issues.

Mid-session test

Assessment Type 1: Quiz/Test
Indicative Time on Task 2: 15 hours
Due: Week 7
Weighting: 20%

 

There will be a mid-session test based on material covered in the relevant lectures.

 
On successful completion you will be able to:
  • Source and interpret macroeconomic data and coherently use the key concepts in macroeconomics.
  • Apply advanced macroeconomic models to understand the behaviour of key macroeconomic variables.
  • Identify and interpret topical macroeconomic issues, and use advanced macroeconomic models to understand how policy should respond to the issues.

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/SEMINARS (refer to https://timetables.mq.edu.au for class time)

This unit will be delivered entirely online.

We are assigned assigned a weekly time slot in the timetable - Thursdays 1-3pm. Pre-recorded lectures in Weeks 1-6 and 8-9 will be available through ECHO and in iLearn prior to the time slot, and should be watched before 2pm - these pre-recorded lectures will each be approximately 2 hours in length. At 2pm each Thursday, an interactive ZOOM session will be held that all students must attend and participate in.

In Weeks 10-13, the interactive ZOOM session will be for the entire assigned time slot (Thursdays 1-3pm).

 

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 (but only 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 Web Page

You can access the ECON8013/7013 web site on iLearn from anywhere on the Internet. To login you need a Username and password. All lecture slides should be available on the iLearn site at least by midday of the lecture.

Unit Schedule

This a planned schedule, and there may be minor variations and readings added as the session progresses.

WEEK 1    (JS)      Monetary policy frameworks – inflation targeting, and alternatives

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,  https://scholar.harvard.edu/files/rogoff/files/dealing_with_monetary_paralysis_at_the_zero_bound.pdf

RBA: Supporting the Economy and Financial System in Response to COVID-19, https://www.rba.gov.au/covid-19/       

Williamson Ch15

WEEK 2    (JS)        Low inflation, the natural rate of unemployment, and rising inflation

Cassidy, N., Rankin,E., Read, M. and Seibold,C.  2019  Explaining Low Inflation Using Models. https://www.rba.gov.au/publications/bulletin/2019/jun/explaining-low-inflation-using-models.html

Blanchard, O. 2018 Should we reject the natural rate hypothesis? Journal of Economic Perspectives, Vol 32, 1 Winter 2018 https://pubs.aeaweb.org/doi/pdf/10.1257/jep.32.1.97

Deepa D. Datta, Laura Feiveson, Ekaterina Peneva, Gisela Rua, 2022  Bottlenecks, Shortages, and Soaring Prices in the U.S. Economy, Fed Notes,  https://www.federalreserve.gov/econres/notes/feds-notes/bottlenecks-shortages-and-soaring-prices-in-the-us-economy-20220624.htm

Williamson Chs 14-15

WEEK 3     (JS)       Links between fiscal policy and monetary policy – the government budget constraint, the fiscal theory of prices, hyperinflation

Blanchard and Sheen 2013 Chs 23-24

Blanchard, O. (2019) Public Debt and Low Interest Rates, American Economic Review, http:\\www.piie.com/system/files/documents/wp19-4.pdf

Cochrane, J.(2011): Understanding Policy in the Great Recession: Some Unpleasant Fiscal Arithmetic. European Economic Review January 2011 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1619585 

WEEK 4     (DO)      Experiences and lessons from four MP periods: the 1970s, Great Moderation, Secular Stagnation and the Recent Post-covid inflation Uplift

Simon, J. (2015), ‘Low interest rate environments and risks,’ Speech to the Paul Woolley Centre, https://www.rba.gov.au/speeches/2015/sp-so-2015-10-08.html

Summers, L. (2014), ‘Reflections on the new secular stagnation hypothesis’, VoxEU, October, https://voxeu.org/article/larry-summers-secular-stagnation

 

WEEK 5      (DO)      The causes of financial crises and policy responses

Reinhard, C. and K. Rogoff (2008), This Time is Different: Eight Centuries of Financial Folly, NBER Paper 13882, March https://www.nber.org/papers/w13882.pdf

RBA Explainer: The Global Financial Crisis, https://rba.gov.au/education/resources/explainers/pdf/the-global-financial-crisis.pdf

WEEK  6     (DO)      Financial regulation: Principles and practice

Yuksel M. (2019), ‘A decade of post-crisis G20 financial sector reforms,’ RBA Bulletin, June https://rba.gov.au/publications/bulletin/2019/jun/pdf/a-decade-of-post-crisis-g20-financial-sector-reforms.pdf

Orsmond D. and F. Price (2016), ‘Macroprudential policy frameworks and tools,’ RBA Bulletin, December https://www.rba.gov.au/publications/bulletin/2016/dec/pdf/rba-bulletin-2016-12-macroprudential-policy-frameworks-and-tools.pdf

WEEK 7       MID-SESSION TEST

WEEK  8       (DO)      China’s economic emergence: Past, present and future

Orsmond, David (2019), China’s Economic Choices, Lowy Institute Analysis, December https://www.lowyinstitute.org/publications/china-s-economic-choices

Garnaut, R., L. Song and C. Fang (2018), Overview in 40 years of Chinese economic reform and development (Australian National University Press), http://press-files.anu.edu.au/downloads/press/n4267/pdf/ch02.pdf

Edwards, J. (2018), ‘Economic conflict between America and China,’ Lowy Institute WP, December,  https://www.lowyinstitute.org/sites/default/files/Edwards_Economic%20conflict%20between%20America%20and%20China_WEB_0.pdf

WEEK 9    (JS)        Digital money and the payments system; the future of cybercurrencies – eg Bitcoin, Libra

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

https://www.rba.gov.au/publications/bulletin/2019/jun/cryptocurrency-ten-years-on.html

Kumar, A, Smith. C 2017 Crypto-currencies – An introduction to not-so-funny moneys

 https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Analytical%20notes/2017/an2017-07.pdf

Richards, T., Thompson, C. and Dark, C., 2020, Retail Central Bank Digital Currency: Design Considerations, Rationales and Implications, RBA Bulletin

https://www.rba.gov.au/publications/bulletin/2020/sep/retail-central-bank-digital-currency-design-considerations-rationales-and-implications.html

Mr. Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, Mr. Damiano Sandri, Hervé Tourpe1, and Mr. German Villegas Bauer, 2022  Digital Currencies and Energy Consumption, IMF e-Library, https://www.elibrary.imf.org/view/journals/063/2022/006/article-A001-en.xml

 

WEEK 10       Group Seminar: The RBA Statement on Monetary Policy, August 2022

WEEK 11       Group Seminar: IMF World Economic Outlook 2022  

WEEK 12       Group Seminar: BIS Annual Report  2022 

WEEK 13       Group Seminar: RBA Financial Stability Review, October 2022

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Changes since First Published

Date Description
16/07/2022 Delivery timings have been made consistent with the University timetable.

Unit information based on version 2022.03 of the Handbook