Students

ECON8013 – Applied Topics in Macroeconomics

2024 – 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
ECON633 or ECON6033 or ECON6049 or ECON6050 or ECON8091
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 of 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.

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 use 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 issues.
  • ULO4: Co-operate with peers in groups to prepare and present the results of collaboration on current topical issues.
  • ULO5: Write and discuss advanced macroeconomic analysis in a creative, logical and professional way.

General Assessment Information

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

Late Assessment Submission Penalty (written assessments) 

Unless a Special Consideration request 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 11.55 pm. 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/presentations, and/or scheduled practical assessments/labs, students need to submit an application for Special Consideration. 

Assessment Tasks

Name Weighting Hurdle Due
Group Research and Presentation 15% No WEEKS 10-13
Final examination 40% No DURING FINAL EXAMINATION PERIOD
Mid-session test 20% No WEEK 7
Essay 25% No WEEK 12

Group Research and Presentation

Assessment Type 1: Presentation
Indicative Time on Task 2: 15 hours
Due: WEEKS 10-13
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 use 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 issues.
  • Co-operate with peers in groups to prepare and present the results of collaboration on current topical issues.
  • Write and discuss advanced macroeconomic analysis in a creative, logical and professional way.

Final examination

Assessment Type 1: Examination
Indicative Time on Task 2: 30 hours
Due: DURING FINAL EXAMINATION PERIOD
Weighting: 40%

 

A two-hour examination will be held during the University Examination Period, and will be on 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 use 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 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 use 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 issues.
  • Write and discuss advanced macroeconomic analysis in a creative, logical and professional way.

Essay

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

 

The 1,500-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, research it widely in journals, books, professional magazines, etc, and write a reasoned essay about the issue and its implications for macroeconomic outcomes and policy.

 
On successful completion you will be able to:
  • Source and interpret macroeconomic data and use 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 issues.
  • Write and discuss advanced macroeconomic analysis in a creative, logical and professional way.

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 Tuesdays 3-5pm (refer to https://timetables.mq.edu.au for any updates to class day/time) in 25WW GB30 Tutorial Room

We are assigned a weekly time slot in the timetable. 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 3pm - these pre-recorded lectures will each be approximately 1- 2 hours in length.

 

 

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  (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 (JS)

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

  • Bernanke, B. and Blanchard, O., May 2024, An analysis of pandemic-era inflation in 11 economies, https://www.piie.com/publications/working-papers/2024/analysis-pandemic-era-inflation-11-economies
  • 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 (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 (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 (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 (DO)

The causes of financial crises and policy responses

  • Reinhart, 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 

MID-SESSION TEST, in class

 

WEEK 8 (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 (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 (JS)

Group 1 Seminar Presentation: The RBA Statement on Monetary Policy, August 2024

 

WEEK 11 (JS)

Group 2  Seminar Presentation: BIS Annual Report 2024 

 

WEEK 12 (JS)

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

 

WEEK 13 (JS)

Group 4  Seminar Presentation: IMF World Economic Outlook Oct 2024 

 

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Unit information based on version 2024.02 of the Handbook