- Class Number 3713
- Term Code 3130
- Class Info
- Unit Value 6 units
- Mode of Delivery In Person
- AsPr Timothy Kam
- AsPr Timothy Kam
- Class Dates
- Class Start Date 22/02/2021
- Class End Date 28/05/2021
- Census Date 31/03/2021
- Last Date to Enrol 01/03/2021
This course introduces contemporary theory for examining central questions in macroeconomics: growth, unemployment, inflation, and business cycles.
Upon successful completion, students will have the knowledge and skills to:
- Be familiar with the main macroeconomic models used to study economic growth and the business cycle
- Be able to formulate in general equilibrium simple intertemporal models of household and firm behaviour
- Understand the key shocks and propagation mechanisms present in business cycle models
- Be able to solve and employ simple stochastic business cycle models to address questions about the macro-economy
Some of the skillsets, major questions, insights and case studies learned in this course relate di- rectly to the frontier work your instructor and his colleagues are engaged in. In particular, the instructor’s emphasis on self-disciplined learning, critical and research-like independent thinking is designed to encourage students to be- come leaders in their own future spheres who are capable of tackling new and challenging issues. Your instructor is an active researcher in the fields of Macroeconomics and Monetary Economics. He sometimes develop new computational methods for solving difficult economic problems, such as dynamic public insurance games in the face of agent heterogeneity, or in models with endogenous market incompleteness in which monetary policy has a non-trivial redistributive role. He publishes regularly in the leading journals of his fields. He is also a regular visitor and contributor to leading policy institutions around the world, such as the U.S. Federal Reserve Bank system, the Reserve Bank of New Zealand, Bank of Japan, and the Hong Kong Monetary Authority. He currently serves as Treasurer and Chief Technology Officer of the not-for-profit Australasian Macroeconomics Society, and, as the convenor of Australia’s leading 4-th-year Honours in Economics program.
Examination Material or equipment
The examinations will likely to be monitored live and online. Details to be provided on WATTLE closer to examination dates. Students are responsible for ensuring that their computer audio and video are in working order. These are required to be active during the examinations.
- Recursive Macroeconomic Theory, 4th Edition, 2018 (MIT Press): : Main textbook*
by Lars Ljungqvist and Thomas J. Sargent (“LS”)
- Economic Dynamics in Discrete Time, 2014 (MIT Press)
by Jianjun Miao (“Mi”)
- Custom Notes (a.k.a. “CN”):
- Linked from WATTLE
- Other Useful References:
- Carl E. Walsh (2003). Monetary Theory and Policy. MIT Press. (“Wa”)
- Ed Nosal and Guillaume Rocheteau (2011), Money, Payments, and Liquidity. MIT Press. (“NR”)
- Daron Acemoglu (2009). Introduction to Modern Economic Growth. MIT Press. (“Ac”)
- Jerome Adda and Russell Cooper (2003). Dynamic Economics. MIT Press.
- Mario J. Miranda and Paul L. Fackler (2002). Applied Computational Economics and Finance. MIT Press.
- Ben J. Heijdra and Frederick van der Ploeg (2002). The Foundations of Modern Macroe- conomics. Oxford University Press.
- John Stachurski and Thomas J. Sargent (2014-). Quantitative Economics (quantecon.org)
- Nancy Stokey and Robert E. Lucas, Jr. (with Ed Prescott). Recursive Methods in Eco- nomic Dynamics. Harvard University Press.
- Charles I. Jones (2013), Macroeconomics, 3rd International Student Edition, New York: Norton. (For undergraduate revision.)
- David Romer (2006), Advanced Macroeconomics, 3rd Edition, McGraw-Hill. (For diploma- level revision.)
*Copies are available from the ANU Library’s 2-Hour Reserve listing. These books are not available as ebooks via ANU Library. Remote students can order copies from any bookseller online.
The modern economics student is expected to possess not just analytical skills but increasingly computational skills, both in academia and in the wider marketplace for economists. You are not expected to have any prior training in such skills, but you are expected to have a flexible and open mind towards learning it as we go.
In this course, we will use the high-level (i.e. user friendly) programming language called Python (currently version 3.x) (http://python.org or https://store.continuum.io/cshop/anaconda/).
- To maximize your experience and feedback on your progress, please attempt all the tutorial problem sets before attending tutorials.
- Most of the learning is reinforced through solving problems on your own and being able to discuss it with the class afterwards.
- An incentive that encourages you to excel in this dimension is provided in the TP and RA assessment items.
Lecturer and Teaching Assistants' Office Hours
- For maximal value, you should have read the relevant materials (textbook, lecture slides) and attempted problems, before turning up to office hours with questions.
- If you have any difficulties, please do not hesitate to come and see us; and do not wait until the end of semester to do so.
- We are here to assist your learning and also to ensure that your university experience continues to be a fun and rewarding one!
- Note: This course does not encourage last minute rote learning. There will be no additional (i.e., pre-examination) office hours provided beyond Week 12 of the instruction period. You are encourage to seek help early on during the semester.
Tests of Progression and Assignments
- Answers to these activities and general discussions relating to how you understood the material tested will be provided in class.
- Your work will be returned to you with comments.
- Feel free to post short questions related to the course material on WATTLE Forum. The usual internet etiquette applies. The teaching team may answer your questions occasionally. However, please reserve long queries to physical office hours, as we can best help you there.
ANU is committed to the demonstration of educational excellence and regularly seeks feedback from students. Students are encouraged to offer feedback directly to their Course Convener or through their College and Course representatives (if applicable). The feedback given in these surveys is anonymous and provides the Colleges, University Education Committee and Academic Board with opportunities to recognise excellent teaching, and opportunities for improvement. The Surveys and Evaluation website provides more information on student surveys at ANU and reports on the feedback provided on ANU courses.
|Week/Session||Summary of Activities||Assessment|
|1||Basic skillset: health check and tool up Tooling Up Week: Some Basics of Scientific Programming in Python. Random Variables and Stochastic Processes; Example of a Stochastic OLG Model; Simulating “cyclical” economic outcomes. Reading assignment: CN; LS, 2 NOTE: Reading references (e.g., "Mi", "LS" and etc.) are referred to in "Required Resources" section below.||Problem Set 1 available mid-week|
|2||Fundamental ideas of this course: Recursions, economic dynamics and explaining reality Economic Growth and Empirical Regularities. Prior Encounters—Recursive Equilibrium by Example: Solow-Swan and other model variations; OLG model. Special Cases: Linear Dynamical Systems. Reading assignment: Mi 1.1-1.6 and 2.1; LS, 2 and 9 (optional); Ac, Ch-9||Problem Set 2 available mid-week Discuss Problem Set 1|
|3||Mainstream theoretical framework: General equilibrium, finance and macro dynamics (I) Business-cycle Measurement and Empirical Regularities Complete financial markets benchmark: Representative- agent result Asset Pricing Fundamental Welfare Theorems of General Equilibrium: Equivalent Planner Problem Model Variations Reading assignment: CN; Mi, 13-14; Wa, 2, 3 (optional)||Problem Set 3 available mid-week Discuss Problem Set 2|
|4||Mainstream theoretical framework: General equilibrium, finance and macro dynamics (II) Business-cycle Measurement and Empirical Regularities Complete financial markets benchmark: Representative- agent result Asset Pricing Fundamental Welfare Theorems of General Equilibrium: Equivalent Planner Problem Model Variations Reading assignment: CN; Mi, 13-14; Wa, 2, 3 (optional)||Problem Set 4 available mid-week Discuss Problem Set 3 Random Problem Set 1/2/3 question(s) assessed - due on Wattle by Sunday 9am (start of week)|
|5||Dynamic programming and Application 1: RBC models Turning infinite-horizon decision problems (infinite- dimensional optimization) into recursive finite- dimensional problems Application to RBC models Approximate linear solution methods (Undetermined Coefficients Method); Connections to black-box time- series modelling; Taking Theory to Data: Structural Estimation Reading assignment: CN; Mi 12; LS, 2||Problem Set 5 available mid-week Discuss Problem Set 4|
|6||Midsemester Exam (in lecture)||Problem Set 6 (The midsemester exam) Prerecorded lecture/workshop Discuss Problem Set 5|
|7||Non-optimal economies, Euler Operators and Application 2: Distorted NK models More Empirical Evidence and Policy Issues - Connecting to mainstream macro data and thinking Rationalizing the undergraduate AD-AS framework as New Keynesian model Solving and Simulating a NK economy; Policy Counter-factuals Introduction: Dynamically inconsistent policy plans and credible public policies Reading assignment: CN; Mi 19, 21; Wa, 8||Problem Set 7 available mid-week Discuss Problem Set 6 Random Problem Set 4/5/6 question(s) assessed - due on Wattle by Sunday 9am (start of week)|
|8||Dynamic programming (again) and Application 3: Job Search and Unemployment Connecting to undergraduate "bathtub model" and long run data on labor markets Unemployment, Job Search Reading assignment: Mi, 18; LS, 6; NR, 1-4||Problem Set 8 available mid-week Discuss Problem Set 7|
|9||Dynamic programming (again) and Application 3-4: Search and Non-Walrasian Matching Markets Connecting to undergraduate "bathtub model" and long run data on labor markets Unemployment, Job Search and Matching Money, Finance and Payments Revisited: A Critique of Mainstream Monetary Policy Models Reading assignment: Mi, 18; LS, 6; NR, 1-4||Problem Set 9 available mid-week Discuss Problem Set 8|
|10||Application 5: Ex-ante Heterogeneity and Wealth Inequality OLG model Human capital Log-normal distributions Dynamics of living standard growth and wealth inequality Reading assignment: Notes||Problem Set 10 available mid-week Discuss Problem Set 9 Random Problem Set 7/8/9 question(s) assessed - due on Wattle by Sunday 9am (start of week)|
|11||Application 6: Ex-post Heterogeneity and Wealth Inequality Extending lessons from Week 2 and 4: When does the representative agents result break apart? How to think about the rich vs poor? Whither model? Connecting back to micro data on wealth and consumption inequality Reading assignment: Notes||Problem Set 11 available mid-week Discuss Problem Set 10|
|12||Application 7: Incomplete international asset markets and sovereign debt defaults How to rationalize observed failures of sovereign governments in repaying international debt? How do we think about excess volatilities in emerging country business cycles? Reading assignment: Notes||Discuss Problem Set 11 Random Problem Set 10/11 question(s) assessed - due on Wattle by Sunday 9am (start of week)|
Tutorials this semester will be delivered both remotely (via Zoom) and on-campus. You are expected to attend one tutorial each week from Week 2 onwards. You must enrol in a tutorial using the Wattle site for this course, and attend the tutorial in which you are enrolled. A selection of tutorials will be open for enrolment prior to the beginning of the semester - the remaining tutorials will be open in week 1 of Semester.?When tutorials are available for enrolment, follow these steps:
1. Log on to Wattle, and go to the course site
2. Click on the link “Tutorial enrolment”
3. On the right of the screen, click on the tab “Become Member of…..” for the tutorial class you wish to enter
4. Confirm your choice
If you need to change your enrolment, you will be able to do so by clicking on the tab “Leave group….” and then re-enrol in another group.?You will not be able to enrol in groups that have reached their maximum number.?Please note that enrolment in ISIS must be finalised for you to have access to Wattle.
|Assessment task||Value||Learning Outcomes|
|Periodic Assessment of Random Problem Set Questions (Hurdle and Compulsory Assessment)||10 %||1,2,3,4,5|
|Midsemester Exam (Optional and Redeemable)||30 %||1,2,3,4,5|
|Final Examination (Compulsory and Hurdle Assessment)||60 %||1,2,3,4,5|
* If the Due Date and Return of Assessment date are blank, see the Assessment Tab for specific Assessment Task details
ANU has educational policies, procedures and guidelines, which are designed to ensure that staff and students are aware of the University’s academic standards, and implement them. Students are expected to have read the Academic Misconduct Rule before the commencement of their course. Other key policies and guidelines include:
- Student Assessment (Coursework) Policy and Procedure
- Special Assessment Consideration Policy and General Information
- Student Surveys and Evaluations
- Deferred Examinations
- Student Complaint Resolution Policy and Procedure
The ANU is using Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. For additional information regarding Turnitin please visit the ANU Online website. In rare cases where online submission using Turnitin software is not technically possible; or where not using Turnitin software has been justified by the Course Convener and approved by the Associate Dean (Education) on the basis of the teaching model being employed; students shall submit assessment online via ‘Wattle’ outside of Turnitin, or failing that in hard copy, or through a combination of submission methods as approved by the Associate Dean (Education). The submission method is detailed below.
Moderation of Assessment
Marks that are allocated during Semester are to be considered provisional until formalised by the College examiners meeting at the end of each Semester. If appropriate, some moderation of marks might be applied prior to final results being released.
Due to travel restrictions this course will be largely delivered through online platforms.?Aspects of the delivery will be asynchronous. However, there will be synchronous activities also taking place (both online and on campus). Details on the delivery of this course and expectations of student participation are outlined in further detail on the Wattle course site in O-week. Attendance at synchronous activities, while not compulsory, is expected in line with “Code of Practice for Teaching and Learning”, clause 2 paragraph (b).
In addition, workshops for this course are a discussion-based class. Providing worked solutions would not effectively compensate for missing a workshop. Students who, through unavoidable and unplanned occurrences, are unable to attend a workshop one week are encouraged to work through the problems and attend a consultation session for discussion and solutions.
See Assessment Tasks. The examinations will likely be monitored live and online. Details to be provided on WATTLE closer to examination dates. Students are responsible for ensuring that their computer audio and video are in working order. These are required to be active during the examinations.
Assessment Task 1
Learning Outcomes: 1,2,3,4,5
Periodic Assessment of Random Problem Set Questions (Hurdle and Compulsory Assessment)
- This is a hurdle and compulsory assessment task: You must have completed at least half of the items in Task 1 and participated in Task 3 (see below) to be eligible to pass this course.
- Your mark for Task 1 will be averaged across all the completed Task 1 components detailed in the Course Overview section above.
- You are advised to take Task 1 seriously and work on the exercises each week carefully and consistently to fully master the course material.
- You may form study groups to discuss but you must submit your own answers each week.
- Work that is not written up properly nor explained clearly may be penalized.
- Where a coding task is required, replicable code in Jupyter Notebook must be submitted. Code lines must be accompanied by each author's unique commentary to demonstrate understanding and original attempts.
- Where mathematical derivations and proofs are needed, you need to provide plain-English explanation of your steps. Unexplained work will be penalized up to 60% of the relevant section.
- Format: Questions requiring problem solving, logical thinking, mathematical proofs, computer coding and writing in plain and professional English.
The choice of which questions/problems in weekly problem sets are assessed for this task will not be revealed to the student until the assessment week is completed.
This is a hurdle assessment in line with the student assessment coursework policy (see https://policies.anu.edu.au/ppl/document/ANUP_004603). You must complete at least 50% of the total number of available assignments to be eligible to sit the final exam and to be eligible to complete the course.
- To accommodate possible weeks where a student may have fallen ill or have reasonable excuses for not completing this task, students are assessed based on the best 50% or all assignment components. The weeks in which these component tasks are due are specified above in the Class Overview table. A failure to meet these minimum requirements will attract an automatic FAIL grade in this course.
Assessment Task 2
Learning Outcomes: 1,2,3,4,5
Midsemester Exam (Optional and Redeemable)
- You are advised to take Task 2 seriously. This will help insure your overall course performance and also enforce you to be up to speed with the course progress.
- If you fail to attend this exam or to complete this Task satisfactorily, the weight for this Task will be automatically shifted towards the final examination.
- Format: Questions requiring problem solving, logical thinking, mathematical proofs, computer coding and writing in plain and professional English. These may be in multiple choice form and/or free response form. The exam will likely be 2 hours in duration and will test all the material covered in lectures, required readings and tutorials/labs leading up to the examination week. More details to be provided by Week 4.
Assessment Task 3
Learning Outcomes: 1,2,3,4,5
Final Examination (Compulsory and Hurdle Assessment)
- This is a hurdle and compulsory assessment task: You must have completed at least half of the items in Task 1 (above) and participated in Task 3 to be eligible to pass this course.
- This is a hurdle assessment in line with the student assessment coursework policy (see https://policies.anu.edu.au/ppl/document/ANUP_004603).
- Format: Questions requiring problem solving, logical thinking, mathematical proofs, computer coding and writing in plain and professional English. These may be in multiple choice form and/or free response form. The exam will likely be at most 3 hours in duration and will test all the material covered in lectures, required readings and tutorials/labs leading up to the examination week. More details to be provided by Week 10.
Academic integrity is a core part of the ANU culture as a community of scholars. At its heart, academic integrity is about behaving ethically, committing to honest and responsible scholarly practice and upholding these values with respect and fairness.
The ANU commits to assisting all members of our community to understand how to engage in academic work in ways that are consistent with, and actively support academic integrity. The ANU expects staff and students to be familiar with the academic integrity principle and Academic Misconduct Rule, uphold high standards of academic integrity and act ethically and honestly, to ensure the quality and value of the qualification that you will graduate with.
The Academic Misconduct Rule is in place to promote academic integrity and manage academic misconduct. Very minor breaches of the academic integrity principle may result in a reduction of marks of up to 10% of the total marks available for the assessment. The ANU offers a number of online and in person services to assist students with their assignments, examinations, and other learning activities. Visit the Academic Skills website for more information about academic integrity, your responsibilities and for assistance with your assignments, writing skills and study.
You will be required to electronically sign a declaration as part of the submission of your assignment. Please keep a copy of the assignment for your records. You do not need to submit via Turnitin.
Regular Assignments (RA) must to be submitted via WATTLE as Jupyter Notebooks with replicable content (unless stated otherwise on RA problem sheet).
For some forms of assessment (hand written assignments, art works, laboratory notes, etc.) hard copy submission is appropriate when approved by the Associate Dean (Education). Hard copy submissions must utilise the Assignment Cover Sheet. Please keep a copy of tasks completed for your records.
Late submission of assignments will not be graded. If an assessment task is not submitted by the due date, a mark of 0 will be automatically awarded.
Accepted academic practice for referencing sources that you use in presentations can be found via the links on the Wattle site, under the file named “ANU and College Policies, Program Information, Student Support Services and Assessment”. Alternatively, you can seek help through the Students Learning Development website.
Extensions and Penalties
Extensions and late submission of assessment pieces are covered by the Student Assessment (Coursework) Policy and Procedure. Extensions may be granted for assessment pieces that are not examinations or take-home examinations. If you need an extension, you must request an extension in writing on or before the due date. If you have documented and appropriate medical evidence that demonstrates you were not able to request an extension on or before the due date, you may be able to request it after the due date.
Distribution of grades policy
Academic Quality Assurance Committee monitors the performance of students, including attrition, further study and employment rates and grade distribution, and College reports on quality assurance processes for assessment activities, including alignment with national and international disciplinary and interdisciplinary standards, as well as qualification type learning outcomes.
Since first semester 1994, ANU uses a grading scale for all courses. This grading scale is used by all academic areas of the University.
Support for students
The University offers students support through several different services. You may contact the services listed below directly or seek advice from your Course Convener, Student Administrators, or your College and Course representatives (if applicable).
- ANU Health, safety & wellbeing for medical services, counselling, mental health and spiritual support
- ANU Diversity and inclusion for students with a disability or ongoing or chronic illness
- ANU Dean of Students for confidential, impartial advice and help to resolve problems between students and the academic or administrative areas of the University
- ANU Academic Skills and Learning Centre supports you make your own decisions about how you learn and manage your workload.
- ANU Counselling Centre promotes, supports and enhances mental health and wellbeing within the University student community.
- ANUSA supports and represents undergraduate and ANU College students
- PARSA supports and represents postgraduate and research students
Macroeconomic Theory and Policy, Monetary Economics, Computational Economics
AsPr Timothy Kam
AsPr Timothy Kam