Macroeconomics
Associate Professor Lachlan McGregor
Two 1-hour lectures and one 1-hour tutorial per week * First, second semester * Clayton *Prohibition: available only to Graduate Diploma of Economic Studies students
Objectives On completion of this subject students should be able to analyse systematically the forces that determine changes in macroeconomic performance and living standards in Australia; understand the relationship between the domestic economy and the international economic environment, as reflected in the behaviour of the balance of payments and exchange rates; appraise critically the issues underlying important contemporary policy debates in Australia and elsewhere; appreciate the nature and relevance of some significant recent developments in macroeconomics; engage in rigorous economic analysis.
Synopsis Review of basic Keynesian macroeconomics; development of the open-economy IS-LM framework and the aggregate demand-aggregate supply framework as a basis for more advanced macroeconomic analysis; principles of monetary and fiscal policy and problems of implementation; alternative theories of aggregate supply; new classical macroeconomics and the implications of imperfect information; new Keynesian macroeconomics and the implications of labour market rigidities; explaining and correcting inflation and unemployment; alternative explanations of the business cycle; a perspective on current debates over the budget, deficit, the national debt, and the international debt.
Assessment Class test: 20% * Examination (2 hours): 80%
Preliminary reading
Stiglitz J Economics Norton 1993
or
McTaggart D and others Economics Addison-Wesley, 1992
Prescribed texts
Gordon R J Macroeconomics 6th edn, Harper Collins, 1993
Maxwell P and Hopkins S (eds) Macroeconomics: Contemporary Australian readings 2nd edn, Harper Educational, 1993