Macroeconomics II 2018

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 14.02.2018 and end on 31.05.2018
  2. Lectures: Thursday and Friday, 08:30 – 10:00; Wednesday, 09:00 – 10:00
  3. By appointment and by default on Wednesday 4:00pm — 5:00pm
  4. Grading: See the syllabus
  5. Tentative dates of mid-term exams: 22.03.2018 and 17.05.2018
  6. Final exam: 21.06.2018 (repeat assessment: 12.07.2018)
  7. You have to indicate if you are taking continuous or unique evaluation option by March 15 in the Virtual Campus. I automatically assign you into continuous evaluation option if you’ve not indicated. If you do not satisfy the criteria of continuous evaluation option (e.g., you’ve lower than a qualifying number of homework submissions) you are automatically fail the course and have to do a repeat assessment in July.
  8. Be careful not to miss deadlines. No submissions of assignments are allowed after deadlines! There is NO other way to earn credit from the course than assignments listed on this page and exams.
  9. 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.
  10. 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 28.02.2018
    2. Assignment – Employment and Unemployment: 8am on 07.03.2018
    3. Assignment – The Aggregate Demand and Aggregate Supply Model: 8am on 21.03.2018
    4. Assignment – The Open Economy version of AD-AS Model: 8am on 25.04.2018
    5. Assignment – Policy Discussion: 8am on 23.05.2018
    6. Assignment – Dynamic Aggregate Demand and Aggregate Supply Model (Fiscal and Monetary policy in a changing world): 8am on 30.05.2018
  11. I have posted online my slides and hand-outs for all lectures.
  12. 18.02.2018
  13. During the last week we have covered 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.
  14. 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.
  15. Most probably there will be an in-class practical exercise next week.
  16. 27.02.2018
  17. We have finished covering the Investments topic and are going to proceed to the topic of Unemployment tomorrow.
  18. We have discussed some of the reasons of the recent financial crisis and world economy turmoil during our previous few classes. You can read about the recession in Spain here. I recommend you to read Prof. Stefania Albanesi’s cutting edge economics paper, if you want to learn more about the housing bubble and housing price collapse in the US. Prof. Stefania Albanesi shows that the term used to call this recession “subprime mortgage crisis” is very misleading.
  19. Practical tests are for a specific week. Make sure you avoid missing others, if you have missed one already.
  20. 01.03.2018
  21. We have finished covering the topic of Unemployment and will proceed covering the Theories for Aggregate Supply.
  22. 02.03.2018
  23. We have started covering today the Theories for Aggregate Supply. We have briefly talked about Robert Lucas, Jordi Gali, and Jaume Ventura. I recommend reading about these prominent economists.
  24. 06.03.2018
  25. Check this figure for unemployment rate in Spain. You can read the following Wikipedia article about the recent economic turmoil in Spain. I recommend to be critical when you are reading such articles and to take every word as a fact.
  26. This is a gentle reminder that you have to indicate that you are taking the unique assessment option by March 15 in the Virtual Campus if you want to select this option of assessment. Otherwise you are going to be assigned into the continuous assessment option.
  27. It is very likely that we have a practical in class exercise and test this week. I recommend you to try to solve problem sets 1-4 on your own as soon as possible.
  28. 07.03.2018
  29. There is a class tomorrow. We are going to finalize the discussion about Aggregate Supply theories, solve problem sets, and the first practical test.
  30. There is a job fair in the UB on March 13. I strongly recommend you to attend it.
  31. 12.03.2018
  32. We have finished covering theories  of aggregate supply and have proceeded to covering the open economy topic.
  33. There can be a practical test this week about unemployment and theories of aggregate supply.
  34. 18.03.2018
  35. The mid-term examination is scheduled to take place on March 22. I would suggest to arrive around 8.15am so that you can start the exam right at 8.30am or before. At the start of the exam you can have on your table only pen, pencil, rubber/white correcter, and a calculator.
  36. We have finished with the Open Economy topic. This topic will not be included be included in the first mid-term exam.
  37. On Wednesday I plan continuing solving with you problem sets and I will talk about the solutions to the last practical exercise.
  38. 19.03.2018
  39. The deadline of assignment 3 has been shifted to 28.03.2018 to reduce its interference with the mid-term period.
  40. 22.03.2018
  41. There is no class on March 23.
  42. 02.04.2018
  43. I have checked your mid-terms and have the grades. You can come to check them tomorrow after 3pm, on Wednesday after 4pm, and on Friday after 2.30pm.
  44. Our next topic of discussion is “The Small Open Economy Version of the AD-AS Model.”
  45. You can read about supply chain networks in small open economies and recent trade wars in this article.
  46. Technologies shape the labor market. You can read about some recent changes because of AI in this article.
  47. 08.04.2018
  48. We have finished covering “The Small Open Economy Version of the AD-AS Model” and have proceeded to “The Large Open Economy.”
  49. I recommend solving on your own problems sets 5 and 6.
  50. 15.04.2018
  51. We have finished covering the Large Open Economy Version of the AD-AS Model. I strongly recommend reading the corresponding chapter in the textbook.
  52. 06.05.2018
  53. We have finished covering the topics about Policies and Government Debt. I strongly recommend reading the corresponding chapter in the textbook.
  54. 07.05.2018
  55. Karl Marx was one of the most influential economists of the 18th century. His theories are some what controversial, and you can read about him here.
  56. 16.05.2018
  57. The mid-term exam tomorrow finishes at 10am. You can start earlier than 8.30am (around 8.20am) if you come early.
  58. 17.05.2018
  59. There is no class tomorrow.
  60. 28.05.2018
  61. You can come and see your exam grades on Monday, May 28, at 11.30am-12.50am and 3-4pm.


Problem Sets