Macroeconomics II 2017

Syllabus: syllabus_Macroeconomics II

Main Textbook(s):

  1. Mankiw, G. N. (2010). Macroeconomics (7th Edition). Worth Publisher.
  2. Mankiw, G. N. (2003). Macroeconomics (5th Edition). Worth Publishers.

Supplementary Textbooks and Readings:

  1. Ball, L. and Mankiw, G. N. (2011). A New Approach to Intermediate Macroeconomics. Worth Publishers.

Course Topics

  1. Microeconomic foundations
    • Consumption – Keynesian consumption function; Fisher’s model; Life-cycle hypothesis; Permanent-income hypothesis; Random walk
    • Investment – Business fixed investment; Residential investment; Inventory investment
        • Chapters 16 and 17 from Mankiw (2003); 17 and 18 from Mankiw (2010)
  2. The Aggregate Demand and Aggregate Supply Model (AD-AS Model)
    • Labour market; The Sticky Wage and Price Models; The Imperfect Information Model
        • Chapters 6 and 13 from Mankiw (2003) and lectures; 6 and 13 from Mankiw (2010)
    • The Open Economy version of AD-AS Model
        • Chapters 5 and 12 from Mankiw (2003) and lectures; 5 and 12 from Mankiw (2010)
  3. Policy Discussion
    • Stabilization Policy and Government Debt
        • Chapters 14 and 15 from Mankiw (2003) and lectures; 15 and 16 from Mankiw (2010)
  4. Dynamic Aggregate Demand and Aggregate Supply Model
    • Chapter 14 from Mankiw (2010)

Course Information

  1. The classes start on 06.02.2016 and end on 31.05.2016
  2. Lectures: Thursday and Friday, 8:30 – 10:00 (room #25 in building 696)
  3. Exercise Sessions: Wednesday, 9:00 – 10:00 (room #25 in building 696)
  4. Office hours: By appointment and on default on Wednesday, 2:00pm – 3:00pm
  5. Grading: See the syllabus
  6. Tentative dates of 2 mid-term examinations: 30.03.2016 and 18.05.2016
  7. Indicate whether you want to proceed with the continuous evaluation option in the Virtual Campus by 25.03.2017
  8. How to study this course and prepare for the exam? I am here to offer help and guidance but you have to do the job! I have prepared non-compulsory practical exercises and listed them by topic in Problem Sets section below. Some of these exercises will show up in in-class practical exercises and you’ll earn points from them. Others will help you gain more knowledge about the subject. I strongly recommend solving these exercises on your own.
  9. I have uploaded course participation exercises in the Virtual Campus. These assignments require reading and summarizing articles. I strongly recommend to start working with them at least two weeks before the deadline. The deadlines are
    1. Assignment – Consumption and Investment Theories: 8am on 07.03.2017
    2. Assignment – The Aggregate Demand and Aggregate Supply Model: 8am on 29.03.2017
    3. Assignment – The Open Economy version of AD-AS Model: 8am on 15.05.2017
    4. Assignment – Policy Discussion: 8am on 25.05.2017
    5. Assignment – Dynamic Aggregate Demand and Aggregate Supply Model: 8am on 31.05.2017
  10. I have posted online my slides and hand-outs for all lectures
  11. 11.02.2017
  12. During the last week we have covered most of the theories for consumption. I strongly recommend to read the corresponding chapter from the textbook and start looking for articles about these theories. I also strongly recommend to start solving the non-compulsory exercises which are available below.
  13. Who are the most influential economists of the recent past? To name a few: John Maynard Keynes, Irving Fisher, Franco Modigliani, and Milton Friedman. You have seen some of their contributions during our class about consumption theories. I  recommend reading about them and about their contributions to economics.
  14. Next week we will finish discussing consumption theories and proceed to the discussion of investments. Most probably there will be an in-class practical exercise next week.
  15. 20.02.2017
  16. We have finished covering theories for consumption and have almost finished covering types of and theories for investments. I strongly recommend to read the corresponding chapters from our main textbook.
  17. Who are the most influential economists of the recent past? To name a few more: James Tobin, Paul Samuelson, and Simon Kuznets. You have seen some of their contributions during our classes about consumption and investment theories. I  recommend reading about them and about their contributions to economics.
  18. 23.02.2017
  19. We have finished covering the theories for investments and have proceeded to covering unemployment. I strongly recommend to read the corresponding chapters from our main textbook. I also strongly recommend to solve optional problems available on this web-page.
  20. We are almost done with discussing unemployment. I strongly recommend to read the corresponding chapter from our main textbook.
  21. Read about wage and price rigidity in this wiki article if you have time to read more about such an important topic in Spain as unemployment. Find a comparison of unemployment rates across some EU countries here. According to this same data, unemployment rate is about 50 percent among individuals below 25 years in Spain, which is very large as compared to, for example, Germany, where it is 10 percent. You can see that here. It is around 17 percent among individuals older than 25 in Spain and 5 percent in Germany. You can see that here.
  22. 01.03.2017
  23. We have finished discussing unemployment today. I strongly recommend to read the corresponding chapter from our main textbook.
  24. We have covered all materials related to Problem Sets 1, 2, 3, and 4. Did you start solving them? Solving these optional problem sets will help you to be better prepared for practical exercises, mid-terms and final exams.
  25. 07.03.2017
  26. We have started discussing Aggregate Supply Theories. I strongly recommend to read the corresponding chapter from our main textbook.
  27. Most likely, there will be an in-class practical exercise this week related to unemployment and, perhaps, consumption and investments.
  28. There are no classes on March 17.
  29. 12.03.2017
  30. We have finished discussing Aggregate Supply Theories and started discussing Open Economy. I strongly recommend to read the corresponding chapters from our main textbook.
  31. Most likely, we will solve together the last problem of in-class practical exercise on this Wednesday.
  32. There are no classes on March 17.
  33. 21.03.2017
  34. Please, remember to make your choice in the Virtual Campus whether you want to take the continuous assessment option or the unique assessment option.
  35. 23.03.2017
  36. We have finished the Open Economy topic. I strongly recommend to read the corresponding chapter from our textbook.
  37. Most likely, we will have a in-class practical exercise tomorrow.
  38. 25.03.2017
  39. The mid-term is scheduled to take place on this Thursday. It includes all the topics we have covered in class, except the topic of “The Small Open Economy Version of AD-AS Model.”
  40. The main instructions for this mid-term exam are: “The mid-term exam is for 90 minutes. You need a pen or pencil. In order to perform the calculations you can use a calculator. No mobile phones are allowed! Please put everything else that you have aside around classroom walls. You should not have other papers or devices on your table.
    The multiple choice questions can have several correct answers as well as several wrong answers. In order to earn points from an exercise, you have to circle all correct answers and no wrong answer. Your calculations should be done with a precision of at least fourth decimal point. Wrong answers earn -2 points.”
  41. 02.04.2017
  42. We have finished covering the small open economy version of the IS-LM model. I strongly recommend to read the corresponding chapter from our textbook.
  43. Watch these Youtube videos about Rational Choice theory, Philips curve, comparative advantage, and impossible trinity
  44. You can come and check your exam results at 1pm on next Friday, April 7.
  45. 13.04.2017
  46. We have finished covering The Large Open Economy and The Large Open Economy Version of AD-AS Model topics. I strongly recommend to read the corresponding chapter from our textbook.
  47. There are no classes on April 21.
  48. 25.04.2017
  49. We have finished discussing the topic about policies. I strongly recommend to read the corresponding chapter from our textbook.
  50. There is going to be an in-class practical exercise this week. Most probably it will take place on Friday.

Slides/Handouts

Problem Sets