Introductory Macroeconomics for Policy Analysis Course Outline 2015
1. Names and contact details Course Presenter: Course Administrator: Andrew Coleman Zaneta Waitai Email: zaneta.waitai@mbie.govt.nz 2. Course overview Macroeconomics is always in the news. Whether it is the exchange rate, gross domestic product, unemployment, the government debt, or the arcane pronouncements made every six weeks by the Governor of the Reserve Bank of New Zealand, it is hard to avoid a daily encounter with some macroeconomic concept or other. Unfortunately, it is just as hard to try and work out what it all means, which bits are important, and which sound-bites makes sense. More importantly, it is difficult to know how the big picture affects everyday decision making, the standard of living of us and our children, and how governments and communities can design policies to make us all better off. This course provides an introduction to the big issues in macroeconomics. Arranged in five topics, it covers: long run economic performance and the growth in living standards basic macroeconomic accounting, economic fluctuations and economic crises. money, finance, wealth, the banking system, and central banking the role of the government. international linkages and trade. This course is based on material taught at the University of Otago, but adapted to the needs of New Zealand public servants and taught over an intensive 2 week period. 3. Class Details Session Date Times Venue 1 16 th November 2015 10.30-12pm MBIE, 15 Stout St, Wellington 12-1pm lunch 1-2.30pm 2 17 th November 2015 10.30-12pm MBIE, 15 Stout St, Wellington 12-1pm lunch 1-2.30pm 3 20 th November 2015 1-2.30pm 2.30-3pm break 3-4.30pm MBIE, 15 Stout St, Wellington 2
4 26 th November 2015 1-2.30pm 2.30-3pm break 3-4.30pm 5 27 th November 2015 10.30-12pm 12-1pm lunch 1-2.30pm MBIE, 15 Stout St, Wellington MBIE, 15 Stout St, Wellington Report to Reception, MBIE, 15 Stout Street, Wellington. There will be a break between each session. Coffee and tea will be provided. 4. Course Costs This course is provided by the Government Economics Network (GEN) at a cost of $500 plus GST per person. 5. Books Charles Wheelan (2010) Naked economics: undressing the dismal science (New York: WW Norton) Professor Wheelan teaches at the University of Chicago (Harris School of Public Policy) and was formerly a correspondent for the Economist magazine. It shows he has written a clear, witty discourse on modern macroeconomics, with no equations and (even more important!) no pictures. This book provides the basis for the lectures and it is strongly recommended you purchase, read, and enjoy it. The book costs less than $26 if shipped from Fishpond. I also recommend Robert Heilbronner (1953) The Worldly Philosophers (New York: Simon and Schuster) This is possibly the second highest selling economics book of all time. It provides a history of economic thought up until 1953, by outlining the major questions, the proposed answers by the most important economists of the time, and all the interesting gossip about these thinkers. As a narrative achievement it is unsurpassed in the economic discipline; it is also an exceedingly good read. It is the place to learn the difference between Adam Smith and David Ricardo, John Maynard Keynes and John Stuart Mill. This book is not needed for the course, but will provide a great introduction as to the questions that make macroeconomics so interesting if you wish to read it afterwards. 6. Lecture Sessions The course is taught in five sessions. Each session will comprise two 90 minute lectures separated by a break. It will be best to have read some of the chapters prior to each session; other readings are provided for interest. 3
Topic 1: Long Run Economic Growth Wheelan Naked Economics chapters 1 (The Power of markets), 6 (Productivity and human capital) and 13 (Development economics) Jesse H Ausebel (2015) Nature Rebounds, seminar presented to the Long Now Foundation 13 January 2015 San Francisco. ( search Google Scholar) Paul Krugman (1996) Pop Internationalism (Cambridge MA: MIT Press) Chapter 11: The Myth of Asia s Miracle More technical readings Jones, Charles (2015) The facts of economic growth National Bureau of Economic Research Working Paper 21142 (search Google Scholar) Topic 2: Basic macroeconomic accounting, and unemployment. Economic fluctuations. Neoclassical and Keynesian economics Wheelan Naked Economics chapter 9 (Keeping score) Ben Bernanke and Robert Frank Principles of Macroeconomics Chapters 4 and 11 (available from the lecturer on request) Blinder, A.S. (2010?) Keynesian Economics The Concise Encyclopaedia of Economics http://www.econlib.org/library/enc1/keynesianeconomics.html Lee, John A. (1971) The Great Depression New Zealand Heritage 6(82) 2089-2095 Taylor, Nick (2012) A Short history of the Great Depression New York Times January 15 2012. Available from: http://topics.nytimes.com/top/reference/timestopics/subjects/g/great_depression_1930s/inde x.html. Topic 3: Money, Finance, and central banking Wheelan Naked Economics chapter 7 (Financial Markets) and chapter 10 (The Federal Reserve) 4
Mc Leay, Michael; Amar Radin; and Ryland Thomas (2014) Money in the modern economy: an introduction, Bank of England Quarterly Bulletin (2014: 1) Mc Leay, Michael; Amar Radin; and Ryland Thomas (2014) Money creation in the modern economy, Bank of England Quarterly Bulletin (2014: 1) Reserve Bank of New Zealand (2010) Explaining New Zealand s Monetary Policy (Reserve Bank of New Zealand, Wellington) Topic 4 The role of Government: rules, taxes, and demand management. Wheelan Naked Economics chapter 3 and 4 (The role of Government) and 9 (Keeping Score) Thomas Sargent (2010?) Rational Expectations The Concise Encyclopaedia of Economics http://www.econlib.org/library/enc1/rationalexpectations.html Topic 5 International Economics Wheelan Naked Economics chapter 11 (International Economics) Globalisation) and 4 (Trade and Froot, Kenneth A. and Thaler, Richard. (1990) Anomalies: Foreign Exchange Journal of Economic Perspectives 4(3) 179 192. Krugman, Paul (1996) Pop Internationalism (Cambridge MA: MIT Press) Chapter 4. Pakko, Michael and Patricia Pollard (1996) For here or to go? Purchasing Power Parity and the Big Mac. Federal Reserve Bank of St Louis Review January/February 3-21 7. Assessment The course will include a short assessment to help students cement their learning. Further details of the assessment will be provided before the course commences. 5
8. Attendance Requirements Full attendance by participants is expected and a record of attendance will be maintained in this subject. Where absence is unavoidable, notification to the Course Administrator as soon as possible is required. If a participant is absent for two sessions or more, additional work in lieu of attendance will be required to be eligible to pass this course. 9. Withdrawal from Course If a participant is unable to attend, the registration may be transferred to another person by advising the Course Administrator in writing at least 2 days before the start of the course. 10. Course Lecturer Andrew Coleman has joint positions at the New Zealand Treasury and the University of Otago, where he teaches introductory economics and economic growth theory. He has previously worked at the Reserve Bank of New Zealand and the University of Michigan. He research encompasses a variety of fields including international finance, New Zealand macroeconomics, and U.S. economic history. In recent years he has focused on tax, housing, and retirement income issues in New Zealand, with a particular focus on how bank regulations and government retirement income policies transfer resources between generations. In 2010 he was a member of the Saving Working Group. 11. About the Government Economics Network The Government Economics Network was established in 2011 to promote the better use of economics in the public sector in New Zealand. The network has three aims: 1) support economics training and professional development; 2) develop linkages between economists; and 3) strengthen economic advice to government. For further information please visit our website: www.gen.org.nz 6