BMA5011 Macro and Int’l Economics Semester II 2007
BMA5011 Macro and Int’l Economics
Office: BIZ1 #04-04
Office Hour: TBA
BL: Blanchard, Olivier. Macroeconomics. (4th edition, Prentice Hall, 2006) Ordered at NUS Co-op
Optional readings are not required for this course but reading the following books will significantly improve your understanding of macroeconomics. Reading these books is totally at your choice.
KR1: Krugman, Paul. Peddling Prosperity. (Norton, 1994)
KR2: Krugman, Paul. The Return of Depression Economics. (Norton, 1999)
The purpose of BMA5011 is to train the student to think systematically about the current state of the economy and macroeconomic policy, and to be able to evaluate the economic environment within which business and financial decisions are made. The course emphasizes the use of economic theory to understand the workings of financial markets and the operation and impact of government policies. Specifically, the course studies the determinants of the level of national income, employment, investment, saving, interest rates, the supply (and demand) of money, inflation, exchange rates, and the formulation and operation of stabilization policies. After taking this course, you are expected to understand articles and reports in Economist or Wall Street Journal more clearly. I will not assign any group project or presentations. But raising questions on the real world in the course of lecture will be always welcome.
Introductory knowledge of economics is strongly recommended, either through a college level economics course or private reading. The course materials, while starting at a basic level, rapidly progress so that the bulk of the analysis is conducted at an intermediate to advanced level; the range of topics covered is also quite extensive. Suggested text for private study is Mankiw, 'Principles of Economics' 3rd edition, Thomson. You should emphasize the macroeconomic parts of these books, but the rudimentary parts of microeconomic concepts of supply and demand, price determination, and market clearing, etc. should also be covered. Especially, it would be very useful to review the following concepts: identity vs. equilibrium condition, nominal vs. real variables, stock vs. flow, and exogenous vs. endogenous variable.
There will be 4 assignments (problem sets) and a final exam. You can discuss about problem sets as a team but you have to submit individual answers.
They will count toward grade as follows.
Lecture 1 Introduction to Economic Analysis (Lecture Notes)
Lecture 2 Chapter 2 Tour of the Book in BL
Lecture 3 Chapter 3 The Goods Market in BL
Lecture 4 Chapter 4 Financial Market (only 4.1-4.2) in BL
Lecture 5 Chapter 5 Goods and Financial Markets: The IS-LM Model in BL
Lecture 6 Chapter 6 The Labor Market in BL
Lecture 7 Chapter 7 Putting All Markets Together: The AD-AS Model in BL
Lecture 8 Chapter 8 The Natural Rate of Unemployment and the Phillips Curve in BL
Lecture 9 Chapter 18 Openness in Goods and Financial Markets in BL
Lecture 10 Chapter 19 The Goods Market in an Open Economy in BL
Lecture 11 Chapter 20 Output, the Interest Rate, and the Exchange Rate in BL
Lecture 12 Chapter 22 Depressions and Slumps (Except for 22-2) in BL
*Read Chapter 4 in KR2
Lecture 13 Asian Currency Crisis
*Read Chapter 5 in KR2
Frequently Asked Questions
Can I use the old editions of Blanchard book?
Yes, you can. But since the end of chapter problems have changed, you may not find the problem set questions assigned. In case you use the old edition, please make copies of the updated parts of the new edition.
How are the problem sets graded?
They will be graded on a scale of check plus, check, check minus, zero (if not handed in).
Can I turn a problem set in late?
Absolutely not. No late problem sets will be accepted.
Am I responsible for the material in the Krugman book?
No. The Krugman book is optional.