The University of Hong Kong Faculty of Business and Economics School of Economics and Finance Economics 1002C/D Introduction to Macroeconomics Second Semester, 2007-2008
I. Information on Instructor and Teaching Assistant Instructor: Office: Phone: Email: Office Hours: Dr. James Yetman KKL Room 915 2857-8506 jyetman@econ.hku.hk Wednesday, Friday 1:30-2:30pm Or by appointment Ms. Crystal Wong mailto:mwonghopo@graduate.hku.hk TBA TBA
Teaching Assistant: Email: Office Hours: Tutorial Times:
II. Course Description and Objectives Description: Whereas microeconomics focuses on how an individual person or firm makes decisions, macroeconomics focuses on the overall economy aggregated across all people and firms. Long term economic growth, short term deviations from the long term trend (i.e., business cycles), unemployment, price levels and inflation, and what policies a government should follow to keep an economy running smoothly are all questions macroeconomists seek to answer. The following questions, which you may have heard discussed on local television or in the newspapers, are questions that macroeconomists in Hong Kong might try to answer: • • • • Why is the Hong Kong economy now growing rapidly? What is the effect of the war in Iraq on the world economy? How will an American recession affect China’s economy? Should Hong Kong abandon its currency board and allow the HK dollar to float? These are all questions that Macroeconomics helps us to address. In Introduction to Macroeconomics, we will develop the framework to discuss these and other important questions in the world around us. Course Objectives: 1. 2. 3. To provide students with basic macroeconomic concepts and theories. To provide an analytical framework to understand macroeconomic policies. To prepare students for more advanced macroeconomic courses.
III. Learning Outcomes Intended learning outcomes (ILO) of the course ILO1. To understand fundamental concepts and measurement issues of macroeconomics. ILO2. To understand fundamental theories of macroeconomics, and to develop necessary analytical skills. ILO3. To identify local and global macroeconomic issues. ILO4. To understand theories and practices of monetary and fiscal policies.
IV. Alignment of Program and Course Outcomes Program Learning Outcome 1. To acquire fundamental concepts and theories of economics and finance 2. To develop analytical skills and economic / financial intuition 3. To identify major issues / problems 4. To apply relevant concepts and analytical tools, identify viable alternatives and make informed choices Course Learning Outcome ILO1, ILO2 ILO2 ILO2, ILO3 ILO1, ILO2, ILO4
V. Teaching and Learning Activities Lectures Instructor will give lectures on major concepts and issues. Problem sets Students will be asked to do problem sets related to the lectures. The problem sets will be submitted electronically each week (details to be announced later). Tutorials The purpose of the COMPULSORY tutorials is to allow students to explore the concepts covered in class at a deeper level and to discuss some real world applications. Consultation Both the instructor and teaching assistant hold weekly consultation hours to address students’ questions. Students are also encouraged to discuss with the instructor and teaching assistant by other means. VI. Assessment Coursework 15% Midterm Test 25% Final Exam 60% The midterm test will be held during class halfway through the term. The coursework grade will be based on weekly assessments that are completed online, starting in the third week of the semester. Both the assessments and the midterm test will consist of multiple choice questions, while the final exam will contain a mixture of both analytical and multiple choice questions.
VII. Course Information Textbook Hubbard, R. Glenn and Anthony Patrick O’Brien (2008), Macroeconomics. Second edition. Publisher: Pearson Prentice Hall. Other References There are many other 1st year macroeconomics textbooks that are written at a similar level to the course text that may be useful, including Parkin, Michael and Robin Bade (2006), Foundations of Macroeconomics, Academic Internet Publishers, Mankiw, N. Gregory (2006), Principles of Macroeconomics, South Western College Publishing, and Stiglitz, Joseph E. and Carl E. Walsh (2006), Principles of Macroeconomics, Fourth Edition, Norton. Online Resources: The course website is http://www.econ.hku.hk/~jyetman/Econ1002/Econ1002.html . Please check here often to find course announcements, links to websites related to course materials, and lecture notes. Please note that you are expected to download the lecture notes before each lecture. Course Schedule It is assumed that students in Economics 1002C/D have already taken Economics 1001 in the first semester. Therefore students are assumed to be familiar with most of the material in the first 4 chapters of the textbook (which cover the microeconomic foundations of the course). If you have not taken Economics 1001, you are advised to read these chapters and to be familiar with their content. The following should be viewed as indicative only; topics may be added or subtracted as time allows. Topic Textbook Schedule
Long-Run Macroeconomics Chapters 7-10 Week 1-4 We develop our understanding of how the economy behaves in the long-run. Short-Run Macroeconomics Chapters 11-12 Week 5-6 In the short-run, economies may behave quite differently. We develop a model that can explain the Business Cycle. Midterm Test Week 6 or 7
Monetary and Fiscal Policy Chapters 13-16 Week 7-11 Governments may use policy to try to influence the behaviour of the economy over time. We examine how policy affects the economy, and pay special attention to the unique behaviour of monetary policy in Hong Kong The International Economy Chapters 6, 17-18 Week 12-13 Hong Kong is a small open economy that has strong economic links with other economies. We explore these links.