School of Marketing and Management
INTERNAL SUBJECT OUTLINE
Spring 2005
Economics 120: Macroeconomics
Subject Lecturer Roderick Duncan
Office: C2-232 (second floor)
Telephone (02) 6338-4982
Fax (02) 6338-4769
Email (preferred contact)
Tutors Jim Browning, Stuart Evennett, Jim MacDougall, John Goldsmith
Contact details provided by your tutor.
Class Contact Lecture Tuesday, 1:00-2:50, C2-101
Tutorials Tuesday, 5:00-5:50, C2-215, T1
Tuesday, 6:00-6:50, C2-215, T5
Wednesday, 5:00-5:50, C2-213, T2
Wednesday, 6:00-6:50, C2-212, T3
Wednesday, 7:00-7:50, C2-212, T4
Thursday, 5:00-5:50, C2-117, T6
*Tuesday, 5:00-5:50, C2-117, T7
*Wednesday, 5:00-5:50, C2-117, T8
Consult Tuesday, 10:00-12:00, C2-G20
Thursday, 10:00-12:00, 1:00-5:00, C2-G20
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SUBJECT DETAILS
Welcome to a new session of study at Charles Sturt University. In this subject macroeconomic concepts and principles are used to study the structure and performance of the Australian economy. Topics include national income measurement and the business cycle, theories of income determination, the financial system and monetary policy, international trade and the balance of payments, macroeconomic policy issues, stagflation and economic growth.
This subject commences with an examination of how the level of economic activity is measured. This is followed by an introduction to the broad features of the business cycle (fluctuations in economic activity), especially varying levels of unemployment and inflation. Next there is relatively detailed coverage of ‘short-run’ income determination theory and its historical origin. This serves as a foundation for studying the application of this theory in the form of fiscal policy.
Attention then focuses on the monetary sector of the economy. The role of the Reserve Bank and the financial system generally is considered. There is detailed coverage of how interest rates and exchange rates are determined. The role of monetary policy is discussed and changes in the ‘mechanics’ of monetary policy since the deregulation of the financial system are highlighted.
Utilising the concepts, techniques and tools of analysis introduced earlier in the subject, emphasis switches to a range of important issues and problems in macroeconomics and the debate over policy solutions. Unemployment, inflation and so-called stagflation are all considered within differing theoretical frameworks, with a focus on different assumptions about wage and price determination. There is also an examination of practical problems in public finance including budget and debt management.
The subject concludes with consideration of the problems and challenges faced by Australia, as a relatively small open economy in an uncertain and very competitive trading environment. Issues such as foreign debt and constraints on economic growth are reviewed.
Teaching Staff
Dr. Roderick Duncan
Dr. Duncan is a lecturer in economics and finance at CSU. Prior to this, he taught at the Georgia Institute of Technology in Atlanta, USA. He studied for his undergraduate degrees in economics and law at the Australian National University and his doctorate in economics at Stanford University. His research interests centre on development problems in Third World countries and especially the links between natural resources and development. He has also been known to write on disparate topics, such as the relationship between rising female education and falling marriage rates.
OBJECTIVES
This subject has been prepared to enable you to:
1. be introduced to some basic concepts in macroeconomics;
2. examine the major features and performance of the Australian economy, and its relationship to the international economy;
3. understand the theories and evidence relating to consumption, investment, government spending and net exports;
4. evaluate the theories and policy prescriptions of the major schools of economics and their relation to government macro-policy;
5. understand the nature of stagflation and the deregulation of the financial system, plus the use of fiscal, monetary and incomes policies;
6. develop communication skills relevant to tertiary-level studies, such as rational argument, critical evaluation and effective listening/writing;
7. understand the big picture of the Australian business environment.
TEXTBOOK (recommended)
You are advised to purchase or have continuous access to the following text:
Jackson, J. and McIver, P. (2004) Macroeconomics, 7th ed., McGraw Hill, Sydney.
Earlier editions of the textbook have much the same content, but be careful to compare the topics and readings to make certain they overlap.
There will be some additional readings that will be held on reserve at the Library.
Mansfield, E. and Yohe, G. (2000), Macroeconomics, Chapter 15, pp. 486-502.
ALTERNATIVE RECOMMENDED TEXT(S) (optional)
There are dozens of current “introduction to macroeconomics” texts. These books all contain much the same material but differ in style and presentation. Go to a bookstore or a library and check a few out. Find one that suits your tastes. Your best bet would be to have access to the Jackson and McIver text in addition to an alternative text.
RECOMMENDED READING (optional)
The Jackson and McIver text has a study guide:
Bredon, G & Curnow, P 2003, Macroeconomics study guide – Jackson McIver, 7th edn, McGraw Hill, Sydney.
Some students find study guides helpful. At the least, it is a source of extra questions with answers to practice on.
WEB REFERENCES
The textbook has a website with chapter notes and practice quizzes:
http://www.mhhe.com/au/jackson7e_macro
There is a class website available from Roderick Duncan’s teaching page:
http://athene.riv.csu.edu.au/~rduncan/Teaching/teaching.html
On the class website, you will find lecture notes and review session notes from previous semesters. All new materials in the class will be distributed through the class website.
There are many helpful websites maintained by Australian government divisions, such as:
Commonwealth Treasury (http://www.treasury.gov.au/)
Reserve Bank of Australia (http://www.rba.gov.au/)
Australian Bureau of Statistics (http://www.abs.gov.au/)
Notices for the class will be placed on the class webpage and on the official CSU forum for the class. The forum is available through the CSU forums portal:
http://forums.csu.edu.au
SUBJECT PROGRAM
LECTURE
/LECTURE TOPIC
/ READINGSJuly 26 / Introduction to macroeconomics / Jackson, Chapters 4 and 5
August 2 / Aggregate expenditures model / Jackson, Chapters 5 and 6
August 9 / AE model and the multiplier / Jackson, Chapters 6 and 7
August 16 / Aggregate demand and aggregate supply model / Jackson, Chapter 8
August 23 / Investment and savings / Mansfield and Yohe, Chapter 15, pp 490-502.
August 30 / Review and mid-term 1
September 6 / Fiscal policy / Jackson, Chapters 9
Semester break
October 4 / Money and the banking system / Jackson, Chapters 10 and 11
October 11 / Monetary policy / Jackson, Chapter 12
October 18 / Unemployment and inflation / Jackson, Chapter 14
October 25 / Economic growth / Jackson, Chapter 16
November 1 / Review and mid-term 2
November 8 / International trade and the balance of payments / Jackson, Chapter 18 and 19
November 14 /
EXAM PERIOD COMMENCES
ASSESSMENT
There are 4 assessment items for this subject.
Assessment Items / Value /Due Date
1. Tutorial papers / 20% / Starting in Tutorial 2 until Tutorial 132. Mid-term examination 1 / 20% / August 30
3. Mid-term examination2 / 20% / November 1
4. Final examination / 40% / During examination period
REQUIREMENTS
To gain a pass in this subject, students must:
§ Achieve a passing grade in the final examination.
§ Attempt ALL 4 areas of assessment; and achieve a total result of 50% or better overall.
ITEM 1: Tutorial papers 20%
Rationale
The purpose of the tutorial papers is to make certain that students are keeping up with the material as we proceed through the course.
Assessment Task
Students are to answer a set of multiple choice and essay questions for each tutorial. The questions will be distributed in the first tutorial. Tutorial papers are handed in during your registered tutorial session. You are advised to make a photocopy of your tutorial paper to keep with you during the tutorial.
Assessment Criteria
Each tutorial paper will be worth 2% of the final grade. Each paper will be marked, but only the top 10 grades on your tutorial papers will be averaged for the grade in the course. You can only submit a tutorial paper if you attend your registered tutorial session.
ITEM 2: Mid-term 1 20%
Rationale
The purpose of mid-term 1 is to ascertain whether students have understood the material up to and including Week 5 in the course.
Assessment Task
Mid-term 1 will be a mixture of multiple-choice and essay questions. The mid-term will be held in the second hour of the class during the regular class time and place.
ITEM 3: Mid-term 2 20%
Rationale
The purpose of mid-term 2 is to ascertain whether students have understood the material up to and including Week 11 in the course. While all of the material will be examinable, mid-term 2 will concentrate on the topics covered in the course since mid-term 1.
Assessment Task
Mid-term 2 will be a mixture of multiple-choice and essay questions. The mid-term will be held in the second hour of the class during the regular class time and place.
ITEM 4: Final examination 40%
Rationale
The purpose of the final exam is to determine that students have adequately understood the material from the course.
Assessment Task
The final exam will be of three hours duration and will cover all topics studied in the subject. The final exam will be conducted in the final examinations week. The structure of the final exam will be a mixture of multiple-choice and essay questions. It will be similar to the sample exam placed at the end of this subject outline. The final exam will be closed book.
The date and time of the final exam will be set by the university.
GRADES
Final grades for this subject are awarded by the CSU Faculty Assessment Committee in accordance with the University’s Assessment Regulations (see current Academic Regulations via www.csu.edu.au). Grades will be based on a student’s aggregate mark for all assessment components, subject to the overriding conditions that a passing grade will not be awarded to any student who fails to achieve a satisfactory performance in the final examination or in the final assignment if the subject does not have an exam.
Aggregate marks may be scaled to produce a distribution of grades which conforms to the expected norms specified in the University’s Assessment Regulations.
ACADEMIC STANDARDS
As an undergraduate student in a university, you are expected to produce work to high academic standards. Written material must be presented well, be thoroughly researched, contain appropriate references, and demonstrate considerable thought and appreciation of the subject matter.
It is expected that you will read the text and other literature thoroughly, and think deeply and critically about what you read. You will be expected to contribute to class discussion, with informed, intelligent insights. It is vital that you do not confine your readings to the text only. Broad reading from various academic literature, as well as management magazines and the business section of the quality newspapers will assist you in your studies. You will find links to additional readings on the class website.
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