INTERMEDIATE MACROECONOMICS

INTERMEDIATE MACROECONOMICS
Semester
SPRING 2015
Class code
ECON-UA 9012-001
Instructor Details
Stephen Hannah
stephen.hannah@nyu.edu
Office hours: By appointment (https://stephenhannah.youcanbook.me/) on class days between 5-6pm
either in our teaching room (if available) or room 302.
Class Details
Intermediate Macroeconomics
Class meeting time Tuesdays 14.00-17.00 hrs
Location: Room 202
Prerequisites
ECON-UA 1, ECON-UA 2, and either MATH-UA 17 or MATH-UA 121
During the course, students will be expected to download and examine data sets (primarily from
official websites) and be familiar with elementary features of Excel. Advanced econometric or
statistical knowledge is not required.
Class Description
Why did the global economy find itself on the edge of a precipice in 2008, why did free markets fail so
spectacularly, how well did governments and central banks cope, are we out of the woods? This course
seeks to equip students with the basic analytical and practical skills necessary to begin answering such
fundamental questions.
As an academic discipline, Macroeconomics has been heavily criticised in recent years: for not
predicting the 2007-onwards credit crunch; for using simplistic, out-of-date models; for ignoring data
that challenged stylised theories; and for failing to acknowledge that economic theory has little to offer
without a clear, socio-political and historical context.
Our principal objective is to counter some of these criticisms, not by reinventing the wheel but rather
by introducing key contemporary issues and seeing what insights we can gain by applying relevant and
appropriate macro analysis. A core objective of this course is to show that Macroeconomics, carefully
and intelligently deployed, can offer helpful insights for addressing society’s key challenges in the 21st
century.
The weekly classes will last three hours and include a short break. The teaching method will primarily
involve lectures, general discussion, problem solving and, occasionally, student presentations and
reviews of homework/assessments. The session-by-session guide provides an overview of the topics
that are likely to be covered although there may be minor additions/exclusions depending on the
available time and other circumstances. Lecture notes, exercises, spreadsheets and additional material
will be made available either in the relevant classes or, more usually, via NYU Classes. Students are
expected to ask questions, provide feedback and participate fully in general discussion.
The lectures can only identify the main points to focus on and are not designed to provide a
comprehensive, self-contained coverage of everything the student needs to know in order to fulfil
course requirements. Partly, this reflects time constraints. More importantly, it is intended to
underline that a substantial part of students’ learning will come through their own efforts:
* reading outside the class; applying ideas to contemporary issues, whether or not they have
been identified within the formal syllabus;
* careful, systematic and thorough note-taking; active discussion and participation with class
members;
* timely and assiduous completion of assessment requirements and any other (non-graded)
exercises
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Desired
Outcomes
Assessment
Components
• A sound, thorough understanding of key macroeconomic models and techniques, embracing
both global and historical perspectives.
• An ability to apply theoretical models to contemporary macroeconomic policy problems and
debates, recognising the roles of global interdependency and expectations.
• Acquire insights into key policy options: the use of fiscal and monetary instruments,
alternative exchange rate regimes and supply-side management. An ability to present
macroeconomic models and associated policy options concisely, clearly and methodically
using equations and diagrams as appropriate
• Assess competing models and policy options in a critical fashion, highlighting strengths and
weaknesses of the underlying theories (including the key assumptions made) and their
empirical relevance.
Mid-term assessment 1 (25%): In-class 1hr test; taken in session 5 covering material in sessions 1-4.
Typically a mixture of numerical problems, definitions and comments in a 6 page booklet.
Mid-term assessment 2 (25%): In-class 1hr test; taken in session 11 covering material in sessions 5-10.
Typically a mixture of numerical problems, definitions and comments in a 6 page booklet.
Final examination (35%): 2hrs duration. Short questions and essays grouped into three sections,
primarily covering material in sessions 11-14. Combined Q&A material typically fills 10-12 pages.
Miscellaneous exercises (15%): This component Includes the submission of written homework
assignments, group presentations and class participation.
Failure to submit or fulfil any required course component results in failure of the class. The structure of
assessments and expectations regarding student work are fully articulated in NYU Classes.
Assessment
Expectations
Required Text
Supplemental
Texts(s) (not
required to
purchase as
copies are in
NYU-L Library)
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Grade A: Consistently rigorous and cogent analysis that clearly and directly answers the questions
assigned. The student shows evidence of comprehensive knowledge of course material and an ability
to apply theory to a critical analysis of policy options and contemporary issues. Reading is shown to
have extended beyond requirements and the student displays historical and global perspective,
independent thought and originality of expression.
Grade B: Consistently accurate and clear reproduction of key theories and ideas, employing, where
appropriate, correct diagrammatic techniques and mathematical analysis. Answers to questions show
some evidence of maturity and depth of thought in several areas. The answers are generally direct,
relevant, well-structured and clear. Knowledge and technical competence appear broadly-based.
Grade C: Students show a reasonable, if patchy, grasp of key theories and their application. The
answers are competent but sketchy in parts suggesting a broad-brush rather than in-depth
understanding in significant areas. References to academic and other sources are limited and there are
signs that the student has failed to understand the subtleties of more advanced topics.
Grade D: Students exhibit limited analytical capabilities. Several significant gaps in understanding are
evident although reasonable efforts appear to have been made in keeping up with the required
reading and exercises.
Grade F: Work is consistently poor and shows a lack of understanding of key concepts. Students display
a broadly-based failure to express arguments logically and clearly. There is little evidence that the
student has made appropriate efforts to keep up with reading and exercises
nd
Jones, C. (2011) Macroeconomics, (2 ed, ISE), WW Norton, ISBN 978-0-393-11828-5
(this is not the latest edition but much cheaper and more than adequate for our purposes; web links to
more recent material will be provided via the course website).
nd
Blanchard, Amighini, and Giavazzi, D. (2013) Macroeconomics: A European Perspective (2 ed),
Pearson, ISBN 978-0-273- 77168-5
th
Burda and Wyplosz (2012) Macroeconomics, (6 ed), OUP, ISBN 978-0-19-960864-5
th
Mankiw, N. Gregory (2012) Macroeconomics (8 ed), Worth Publishers, ISBN 978-1-464-12167-8
rd
Miles, Scott and Breedon (2012) Macroeconomics: Understanding the Global Economy (3 ed), John
Wiley & Sons, ISBN 978-1-119-99571-5
Internet Research
Guidelines
Additional
Required
Equipment
Additional reading, sources and external websites will be indicated via the course website, NYU Classes
& lecture notes
Direct access to course website (password = nyuls2015)
http://nyul.stephenhannah.com/home/intermediate-macro/
NB do not use “www”
Scientific calculator, spreadsheet software (eg Excel)
Suggested readings (including hyperlinks) for each session are provided on the course website
Session 1
Tue 3 Feb
Income & Wealth Accounting
Course overview, accounting principles, interpreting GDP data, key problem areas, main identities, net
lending and wealth
Session 2
Tue 10 Feb
Capital Accumulation
Compound growth, maths and models, production basics, Cobb-Douglas function, basic Solow model
and diagrams, transitions versus steady states, Golden Rule
Session 3
Tue 17 Feb
Productivity & Innovation
TFP and growth accounting, modelling technological progress, productivity puzzles, secular stagnation
and robots, governments and supply-side policy; Submit HWK#1
Session 4
Tue 24 Feb
Distribution & Growth
Inequality and poverty, fragile middles, international GDP comparisons, development and convergence,
institutions and governance, factor flexibility and wage/profit shares; RCC BoE on Friday 27th
Session 5
Tue 3 Mar
Mid-term assessment 1
st
21 Century Capital
Revival of Classical political economy, historical tendencies and databases, “laws” of capitalism, key
Piketty themes, policy issues
Session 6
Tue 10 Mar
Cycles & Shocks
Defining & measuring cycles, output gaps & Okun’s law , introducing stabilisation policy, shocks &
propagation
Session 7
Tue 17 Mar
Money & Finance
Money demand & supply, interest rates & IS curve, financial ratios & balance sheets, financial cycles &
stability, the Great Recession
Session 8
Tue 24 Mar
Price & Wage Setting
Wages, prices and markets, Phillips & AS curves, inflation expectations, inflation performance; Submit
HWK#2
Session 9
Tue 31 Mar
Monetary & Financial Policy
Money & the economy, central bank strategy, tactics & operations, unconventional policy, reform &
regulation
Session 10
Tue 14 Apr
Fiscal Policy
Crowding out analysis, assessing the fiscal stance, estimating multipliers, austerity versus growth, fiscal
sustainability
Session 11
Tue 21 Apr
Mid-term assessment 2
The FRB/US Model
Overview & context, model access, sectors & structure, sample simulations
Session 12
Tue 28 Apr
Macro Scenarios I
Model perspective, IS and TR curves, AD-AS curves, policy & credibility, closed economy model; Group
presentations
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Session 13
Tue 5 May
Currencies & Capital Flows
Accounting revisited, currencies & competitiveness, exchange rate regimes, global capital & interest rate
parity
Session 14
Tue 12 May
Macro Scenarios II
Mundell-Fleming model, interpreting IRP, exploring inflation pressures, open economy scenarios, course
review
Session 15
Tue 19 May
Final examination
Classroom
Etiquette
Toilet breaks should be taken before or after class or during class breaks.
Food & drink, including gum, are not to be consumed in class.
Mobile phones should be set on silent and should not be used in class except for emergencies.
Please kindly dispose of rubbish in the bins provided.
Required CoVisit to Bank of England, Threadneedle Street, London EC2R 8AH.
curricular Activities Friday 27 February 2015, 3-5pm
Estimated Travel
Costs
No significant cost
British Museum Room 68 (The Citi Money Gallery)
Suggested CoScience Museum Phillip’s Economic Computer 1949
curricular Activities
Your Instructor
http://www.stephenhannah.com/about/
NYU LONDON ACADEMIC POLICIES
Plagiarism Policy
Students must submit an electronic copy of each piece of their written work to www.turnitin.com.
Further information about this will be provided to you separately.
Late Submission
of Work
Written work due in class must be submitted during the class time to the professor. Late work should be
submitted in person to a member of NYU London staff in the Academic Office (Room 308, 6 Bedford Square)
during office hours (Mon – Fri, 10:30 – 17:30). Please also send an electronic copy to academics@nyu.ac.uk for
submission to Turnitin.
Work submitted within 5 weekdays after the submission time without an agreed extension receives a penalty of
10 points on the 100 point scale.
Written work submitted more than 5 weekdays after the submission date without an agreed extension fails and is
given a zero.
Please note end of semester essays must be submitted on time.
Attendance
Policy
Study abroad at Global Academic Centres is an academically intensive and immersive experience. Learning in such
an environment depends on the active participation of all students. As classes typically meet once a week, even a
single absence can cause a student to miss a significant portion of a course.
To ensure the integrity of this academic experience, class attendance is mandatory and unexcused absences will
be penalized with a two percent deduction from the student’s final course grade. Students are responsible for
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making up any work missed due to absence. Repeated absences in a course may result in failure.
How to report an absence
Absences from class must be reported to NYU London administrative staff using the online Absence Form:
http://tinyurl.com/nyulabsence
Absences can ONLY be excused if they are reported using this form. Students should NOT approach their class
instructor for an excused absence. However, students should contact their class instructor to catch up on missed
work.
Medical absences
If you are unable to attend a class due to ill-health, you must provide details of your illness and class(es) missed to
NYUL staff using the online Absence Form WITHIN SEVEN DAYS of your return to class.
Please do not use the form to report a medical emergency or to request urgent assistance. In a medical
emergency call 999 and ask for an ambulance. NYU London staff are available to offer support, whatever time of
day. If you would like to speak to a member of staff urgently to request support with a medical problem, please
call 0800 316 0469, selecting option 2.
Non-medical absences
If you have to miss class for an unavoidable, non-medical reason you must provide details to NYUL staff using the
online Absence Form at least SEVEN DAYS PRIOR to the date(s) in question. Examples of valid non-medical
reasons are as follows: religious holiday; family wedding; scholarship competition; family emergency. If in doubt
please speak to a member of Academics staff or email academics@nyu.ac.uk.
Further information regarding absences
NYU London staff carefully monitor student attendance and absence records. In most cases full completion of
the online Absence Form will be sufficient to excuse your absence. However, in certain circumstances, you will be
asked to provide additional information/verification before it can be excused. If we notice that you have multiple
absences you will be contacted to arrange a meeting with a member of staff.
Unexcused absences from exams are not permitted and will result in failure of the exam. Students may not take
an exam before or after other students in the class, and may not leave the programme before all course work has
been submitted.
Please refer to the NYU Wikis Page for the full absence policy: https://wikis.nyu.edu/x/awRgAw
Grade conversion
NYU in London uses the following scale of numerical equivalents to letter grades:
A=94-100
A-=90-93
B+=87-89
B=84-86
B-=80-83
C+=77-79
C=74-76
C-=70-73
D+=67-69
D=65-66
F=below 65
Where no specific numerical equivalent is assigned to a letter grade by the class teacher, the midpoint of the
range will be used in calculating the final class grade (except in the A range, where 95.5 will be used).
Grading Policy
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NYU in London aims to have grading standards and results in all its courses similar to those that prevail at
Washington Square.