Ak/Econ-4020: Advanced Macroeconomics

York University

Faculty of Liberal Arts & Professional Studies

Department of Economics

SUMMER-S2 2014

Course # and Title:

AP/ECON 2450 3.0B – Intermediate Macroeconomics Theory-II

Course Webpage:

NOTE: Course is run on Moodle @yorku. You log in with York ID @

https://moodle.yorku.ca/moodle/my/

Course Instructor/Contact:

Name: Zafar Kayani

Office: Atkinson – 736

Phone: 416-736-2100 Ext. 33501

Office Hours: MW 1:45-2:45PM

Email:

Lecture Time and Location:

Lecture: MW 3:00 – 6:00pm

Lecture Hall: ACW-006

TA hours: TBA

Prerequisite / Co-requisite:

AP/ECON 2400 3.00

Course Description:

This course is a continuation of AP/ECON 2400. The topics in this course will refine our understanding of the economy. This course will focus on the Macroeconomics of short-run fluctuations. The IS-LM model will be used to link goods and the money markets. The course also looks at the micro-economic foundations of macro-economic relationships such as the consumption, investment and money demand functions. The Main purpose of the course is to realize the significance of theory in the policy-making process. Therefore, a special discussion will be made to see the effects of the monetary and fiscal policy variables on the behavior of the whole economy.

Weighting of Course & Evaluation:

MIDTERM EXAM: (July 9, 2014, Chapters: 10, 11, 12, 13 and 14) 50%

FINAL EXAM: (comprehensive: 20% midterm and 80% post midterm material) 50%

Maximum Value of (Option1: Midterm 50% + Final 50% OR Option2: Final 100%)

Moodle: is a learning tool that is used for this course. The class material: lecture notes, assignments, grades and course related announcements will be posted on the Moodle. It is recommended that you frequently log on to the Moodle to view the updated posts.

Grading

The grading scheme for the course conforms to the 9-point grading system used in undergraduate programs at York (e.g., A+ = 9, A = 8, B+ = 7, C+ = 5, etc.). Assignments and tests will bear either a letter grade designation or a corresponding number grade (e.g. A+ = 90 to 100, A = 80 to 90, B+ = 75 to 79, etc.)

Course Text / Readings:

Text Book: N. Gregory Mankiw & William Scarth, Macroeconomics. 4rd Canadian Ed., Worth Publishers, New York 2011.

Exams and Exam Policy: There is no make-up for the missing midterm exam. If you miss midterm exam then I will transfer the weight of the midterm exam to the final exam. You must notify me within forty-eight hours after the midterm exam or before the midterm exam with your valid and well documented excuse by in person, by email or in writing. Failing to report missing midterm exam will cost you zero in the midterm exam.

Students who are absent from the final examination and requesting for deferred standing must follow the Guidelines for Deferred Standing of the Department of Economics.

http://dept.econ.yorku.ca/undergraduate/Deferred_Standing1.pdf.

The request for deferred standing will not be approved if the conditions listed on the Guidelines are not satisfied.

Organization of the Course (Topics):

WEEK-1

Chapter 10: Aggregate Demand I: Building the IS-LM Model
10-1 The Goods Market and the IS Curve

10-2 The Money Market and the LM Curve

10-3 The Short-Run Equilibrium

Chapter 11: Aggregate Demand II: Applying the IS-LM Model
11-1 Explaining Fluctuations with the IS–LM Model

11-2 IS–LM as a Theory of Aggregate Demand

WEEK-2

Chapter 12: The Open Economy Revisited: The Mundell-Fleming Model and the

Exchange-Rate Regime

12-1 The Mundell–Fleming Model

12-2 The Small Open Economy Under Floating Exchange Rates

12-3 The Small Open Economy Under Fixed Exchange Rates

12-4 Interest-Rate Differentials

12-5 Should Exchange Rates Be Floating or Fixed?

Chapter 13: Aggregate Supply and the Short-Run Trade-Off Between Inflation and

Unemployment
13-1 The Basic Theory of Aggregate Supply

13-2 Inflation, Unemployment, and the Phillips Curve

WEEK-3

Chapter 14: A Dynamic Model of Aggregate Demand and Aggregate Supply

14-1 Elements of the Model

14-2 Solving the Dynamic Model

14-3 Using the Model

WEEK-3 (MIDTERM EXAM JULY 9, CHAPTERS: 10-14)

WEEK-4:

Chapter 15: Stabilization Policy
15-1 Should Policy Be Active or Passive?

15-2 Should Policy Be Conducted by Rule or by Discretion?

Chapter 16: Government Debt and Budget Deficits
16-1 The Size of the Government Debt

16-2 Problems in Measurement

16-3 The Traditional View of Government Debt
16-4 The Ricardian View of Government Debt

WEEK-5

Chapter 17: Consumption
17-1 John Maynard Keynes and the Consumption Function

17-2 Irving Fisher and Inter-temporal Choice

17.3 Franco Modigliani and the Life-Cycle Hypothesis

17-4 Milton Friedman and the Permanent-Income Hypothesis

Chapter 18: Investment
18-1 Business Fixed Investment

18-2 Residential Investment

18-3 Inventory Investment

WEEK-6

Chapter 19: Money Supply and Money Demand
19-1 Money Supply

19-2 Money Demand

Next Steps for Canadian Monetary Policy

http://www.bankofcanada.ca/wp-content/uploads/2010/06/amano.pdf

Additional information:

Academic Accommodation for Students with Disabilities

Alternate Exam and Test Scheduling

Grading Scheme and Feedback Policy

The Senate Grading Scheme and Feedback Policy stipulates that (a) the grading scheme (i.e. kinds and weights of assignments, essays, exams, etc.) be announced, and be available in writing, within the first two weeks of class, and that, (b) under normal circumstances, graded feedback worth at least 15% of the final grade for Fall, Winter or Summer Term, and 30% for ‘full year’ courses offered in the

Fall/Winter Term be received by students in all courses prior to the final withdrawal date from a course without receiving a grade. "20% Rule"

Important Course Information for Students:

All students are expected to familiarize themselves with the following information, available on the Senate Committee on Curriculum & Academic Standards webpage; http://www.yorku.ca/secretariat/policies/index-policies.html/

• York’s Academic Honesty Policy and Procedures/Academic Integrity Website

• Ethics Review Process for research involving human participants

• Course requirement accommodation for students with disabilities, including physical, medical, systemic, learning and psychiatric disabilities

• Student Conduct Standards

• Religious Observance Accommodation

ACADEMIC HONESTY: The Faculty of Liberal Arts and Professional Studies considers breaches of the Senate Policy on Academic Honesty to be serious matters. To quote the Senate Policy on Academic Honesty: The Policy on Academic Honesty is an affirmation and clarification for members of the University of the general obligation to maintain the highest standards of academic honesty. As a clear sense of academic honesty and responsibility is fundamental to good scholarship, the policy recognizes the general responsibility of all faculty members to foster acceptable standards of academic conduct and of the student to be mindful of and abide by such standards.

Suspected breaches of academic honesty will be investigated and charges shall be laid if reasonable and probable grounds exist.

Grading Scheme and Feedback (Senate)Policy:
http://www.yorku.ca/secretariat/policies/document.php?document=86

IMPORTANT COURSE INFORMATION

The Senate Committee on Curriculum & Academic Standards (CCAS) provides a Student Information Sheet that includes:

Students should review the York Academic Honesty policy for themselves at:

York's Academic Honesty Policy & Procedures/Academic Integrity Web site

Access/Disability

Religious Observance Accommodation

Student Code of Conduct

No examinations or tests collectively worth more than 20% of the final grade in a course will be given during the final 14 calendar days of classes in a term. The exceptions to the rule are classes which regularly meet Friday evenings or on Saturday and/or Sunday at any time, and courses offered in the compressed summer terms. Final course grades may be adjusted to conform to Program or Faculty grades distribution profiles.