Students

ECON7013 – Applied Topics in Macroeconomics

2023 – Session 2, In person-scheduled-weekday, North Ryde

General Information

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Unit convenor and teaching staff Unit convenor and teaching staff Convenor
Jeffrey Sheen
jeffrey.sheen@mq.edu.au
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
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

See https://policies.mq.edu.au/document/view.php?id=190&version=1

Assessment Tasks

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

Final examination

Assessment Type 1: Examination
Indicative Time on Task 2: 30 hours
Due: In final examination period - November
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.

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.

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

This unit will be jointly delivered  face-to-face and online, on Mondays 3-5pm (refer to https://timetables.mq.edu.au for any updates to class day/time)

We are assigned assigned a weekly time slot in the timetable. Pre-recorded ectures 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 3pm - these pre-recorded lectures will each be approximately 2 hours in length.

On Mondays from 3:30-5pm from 24 July  until 2 October 2023 (except 11, 18 September),  we will be having a Q+A session. This will be formally held face-to-face in room 25 Wallys Walk A210, where we will also be using live ZOOM. You are welcome to attend  either the face-to-face or ZOOM. Please bring your computers/smart phones to the former. The ZOOM link is on iLearn.

From Monday 9 October (weeks 10-13), the seminar sessions will begin at 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 a 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 on Mondays..

Unit Schedule

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

progresses.

WEEK 1 (24 July, 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/
  • RBA Review (March 2023), www.rbareview.gov.au
  • Williamson Ch15

 

WEEK 2 (31 July, JS)

Low inflation, the natural rate of unemployment, and rising inflation

  • Bernanke, B. and Blanchard, O., May 2023, What caused the US Pandemic-Era Inflation? Hutchins Centre, Brookings. https://www.brookings.edu/wp-content/uploads/2023/04/Bernanke-Blanchard-conference-draft_5.23.23.pdf
  • Lorenzoni, G. and Werning, I., April 2023, Inflation is conflict. https://economics.mit.edu/sites/default/files/inline-files/conflict%20inflation_0.pdf
  • 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
  • Williamson Chs 14-15

 

WEEK 3 (6 August, JS)

Links between fiscal policy and monetary policy – the government budget constraint, debt sustainability, 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 (13 August, JS)

Digital money and the payments system; the future of , CBDCs

  • 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-designconsiderations-rationales-and-implications.html
  • Itai Agur, Jose Deodoro, Xavier Lavayssière, Soledad Martinez Peria, DamianoSandri, Hervé Tourpe1, and 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 5 (20 August, 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 6 (27 August, 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 7 (4 September)

 

MID-SESSION TEST, online, Monday 4 September, 3pm

 

WEEK 8 (25 September, 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 9 (2 October, 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 10 (9 October, JS)

Group 1 Seminar Presentation: The RBA Statement on Monetary Policy, August 2023

 

WEEK 11 (16 October, JS)

Group 2  Seminar Presentation: BIS Annual Report 2023 

 

WEEK 12 (23 October, JS)

Group 3  Seminar Presentation: Intergenerational Report: https://treasury.gov.au/publication/2021-intergenerational-report

 

WEEK 13 (30 October, JS)

Group 4  Seminar Presentation: IMF World Economic Outlook Oct 2023 

 

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Changes since First Published

Date Description
21/07/2023 New face-to-face venue for weekly sessions
06/07/2023 n/a

Unit information based on version 2023.03 of the Handbook