Download A. Course Outline 2017

Macroeconomics – Theory and Policy
University of Witwatersrand
School of Economic and Business Sciences
Economics Honours 1st Semester 2017
Course Codes: ECON4037, ECON4057
Lecture times: Thursdays from 10:00 to 12:00
Note this schedule may be subject to change. In such circumstances, please keep
a close eye on the course website www.kennethcreamer.co.za for changes to this
schedule.
Lecturer: Dr Kenneth Creamer
Contact email: [email protected]
Consultation times: Thursdays before or after lectures (by appointment)
1.
Introduction
The Honours course “Macroeconomics – Theory and Policy” aims to equip
students with the formal tools of macroeconomic theory, specifically as these
pertain to monetary economics, demand side issues, supply side issues, open
economy modelling, monetary policy, fiscal policy and macro-prudential policy.
In addition to the study of theoretical models, various relevant historical, empirical
and policy matters are also included in the course materials.
2. Description of course
Lecture 1 – 9 February 2017
Motivation for Macroeconomics models, Aggregate Demand, Aggregate Supply
and Business Cycles
Carlin and Soskice (2006) Chapter 1 & 2
Lecture 2 – 16 February 2017
Inflation Unemployment and Monetary Rules
Carlin and Soskice (2006) Chapter 3
Lecture 3 – 23 February 2017
Labour Markets and Supply-Side policies
Carlin and Soskice (2006) Chapter 4
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Lecture 4 – 2 March 2017
Monetary Policy
Carlin and Soskice (2006) Chapter 5
Lecture 5 – 9 March 2017
The Open Economy in the Short Run
Carlin and Soskice (2006) Chapter 9
Lecture 6 – 16 March 2017
Inflation and Unemployment, Shocks and Policy Responses in the Open Economy
Carlin and Soskice (2006) Chapter 10 & 11
Lecture 7 – 23 March 2017
Fiscal Policy
Carlin and Soskice (2006) Chapter 6
CLASS TEST – 6 April 2017
Lecture 8 – 20 April 2017
Money, Banking and the macro-economy
The financial sector and crises
Carlin and Soskice (2014) Chapter 5 & 6
Lecture 9 – 4 May 2017
Guest lectures on ‘Monetary Policy’ and ‘Fiscal Policy in South Africa’
Presented by Brian Kahn, Member of the SARB’s Monetary Policy Committee and
Michael Sachs, National Treasury
Lecture 10 – 11 May 2017
The global financial crisis, applying the models
Carlin and Soskice (2014) Chapter 7
Lecture 11 – 18 May 2017
Monetary Policy
Carlin and Soskice (2014) Chapter 13
3. Outcomes
Through participation in the course, students should be able to:
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- make use of formal macroeconomic models to explain the impact of shocks or
changes in key domestic or international variables,
- make use of formal macroeconomic models to explain the impact of monetary and
fiscal policy decisions and to explain the objectives of such policy frameworks,
and
- discuss macroeconomic theory and apply such theory in the context of business
cycles, inflation, unemployment and labour market developments.
4.
Teaching methods
Lecture Times: Thursdays from 10:00 to 12:00 in the SEBS Seminar Suite on the
1st floor of NCB
5.
Student assessment/s
Assessments: Mid-term test 50%; Exam 50%
6.
Assessments
6.1 Formative assessment
A mid-term test will be arranged to assess students grasp of the course materials
6.2 Summative assessment
Attendance and participation in the lectures are an essential component of the
course and will provide the students with a forum to engage on the course
materials.
6.3 Assessment criteria
Students will be required to write a number of clear, well-argued essays dealing
with problems canvassed during the course, in both the mid-term test and the final
exam. Marks will be awarded on the basis of the overall organisation of such
essays, the analytic ability displayed in such essays, mastery of the relevant
theoretical frameworks and the ability to apply relevant historical and policy
materials.
6. Reading Materials
Primary Texts:
"Macroeconomics - Imperfections, Institutions and Policies" by Wendy Carlin
and David Soskice; Published in 2006 by Oxford University Press
and
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"Macroeconomics – Institutions, Instability and the Financial System" by Wendy
Carlin and David Soskice; Published in 2014 by Oxford University Press
Additional Readings:
Adelzadeh & Alvillar, “National Minimum Wage in South Africa: Quantification
of impact” (November 2015)
Akerlof, Dickens and Perry, “Options for Stabilization Policy”, The Brookings
Institute, Policy Brief 69 (February 2001)
Algu and Creamer, “Evaluating South Africa’s Open Economy’ South African
Journal of Economics Vol.85-1 (January 2017)
Aron, Creamer, Muellbauer and Rankin, ‘Exchange Rate Pass-Through to
Consumer Prices in South Africa: Evidence from Micro-Data” Journal of
Development Studies Vol 50 - 1 (January 2014)
Aron & Muellbauer, “A review of Monetary Policy in South Africa during 19942004” (2005)
Ball L and Mankiw NG, “The NAIRU in Theory and Practice” (2002)
Bhorat & Oosthuizen, “The differential impact of inflation on Poor South African
Households” (2003)
BIS 84th Annual report “In search of news compass”
Bruno M, Easterly W. “Inflation crises and long-run growth”, Journal of
Monetary Economics (1998)
Bundy C, Poverty in South Africa Past and Present (2016)
Creamer, ‘Fiscal Policy in South Africa’ for publication in the Oxford Companion
to the Economics of South Africa (2014)
Creamer, “Macroeconomic Policy in South Africa since 1994”, unpublished paper
prepared for DPRU and African Development Bank (2015)
Creamer, ‘Open economy macroeconomic policy in South Africa, State of the
Nation, HSRC (2014)
Creamer and Botha, “Assessing nominal GDP targeting int eh South African
context”, Central Bank Review (2017)
Creamer, Rankin and Farrell, “What price-level data can tell us about pricing
conduct in South Africa”, South African Journal of Economics Vol.80-4
(December 2012)
Duncan, “Asia its reserves and the coming dollar crisis” (2003)
Foley, “Varieties of Keynesianism” International Journal of Political Economy
vol.43, no.1 (Spring 2014)
Guzman, Ocampo and Stiglitz, “Real exchange rate policies for economic
development” (2014)
Inchauste Lustig Maboshe Purfield and Woolard, “The distributional impact of
fiscal policy in South Africa”, World Bank Working Paper 7194 (2015)
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Malikane and Mokoka “The new Keynesian Phillips cure: endogeneity and
misspecification, Applied Economics (2014)
Mishkin, “Strategies for controlling inflation” (1997)
Ostry, Ghosh and Chamon, “Two Targets, Two Instruments: Monetary and
Exchange Rate Policies in Emerging Market Economies, IMF Staff Discussion
Note (2012)
Pilbeam, “International Finance” (3rd edition) (2006) Chs. 3 and 4
Romer D, Advanced Macroeconomics (3rd edition), Chapter 10 Inflation and
Monetary Policy and Chapter 11 Budget Deficits and Fiscal Policy
Seekings & Nattrass “What is at issue in the minimum wage debate?” (January
2015)
Sinclair, “The transmission of monetary policy through interest rates: policy rate
effects on other interest rates, asset prices, consumption and investment” (2005)
South African Reserve Bank “Monetary Policy Review” – May 2011
Streeck, “The Crises of Democratic Capitalism”, New Left Review 71 (Sept Oct
2011)
Valodia I, et al “A national Minimum Wage for South Africa” (Report 2016)
7. Online resources
The course outline, lecture notes and related readings will be accessible at
www.kennethcreamer.co.za
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