Macroeconomics Theory and Policy

Macroeconomics Theory and Policy: ECO202Y1

Based on this schedule, in general, we have 3 hours of lecture in one week, and 2 hours of lecture
plus 1 hour of tutorial in the next week.
– There could be exceptions to this schedule. Please consult with the Quercus website to
check which weeks we have tutorials.
– In the first week of classes we will have 3 hours of lecture.
– The TAs may run extra tutorials within or outside the tutorial time slots for writing
assignments, if necessary.
Course Description:
This course studies the behavior of economies in aggregate level. This is including macroeconomic
behavior of economic variables in short run, i.e. economic fluctuations and business cycles, as well as
the medium and long run adjustments and trends, and of course economic expansion. In each case,
first closed economies are studied, and then we extend our models and knowledge to open economies.
Moreover, we will use our models in order to analyze the impacts of shocks, expectations, and
government policies.
Exclusions: ECO208Y1, ECO209Y1
Prerequisites: ECO100Y1 (67%)/(ECO101H1(63%), ECO102H1(63%))/ECO105Y1 (80%);
MAT133Y1/( MAT135H1, MAT136H1)/ MAT137Y1/ MAT157Y1
Prerequisites are strictly checked and enforced and must be completed before taking a course. By
taking this course you acknowledge that you will be removed from the course at any time, if you do
not meet all the requirements set by the Department of Economics. For further information you can
consult the 2018-2019 Courses Calendar, which is available from the Registrar’s Office.
Textbook:
Olivier Blanchard, David Johnson, Macroeconomics, Fifth Canadian Edition (2015).
You can use the older Canadian edition of the book at your own risk. You need to be careful about
the differences in terms of materials, assignments and their solutions.
Evaluations:
For this course, you need to complete three term tests, a final exam, two writing assignments, and a
bunch of graded on-line assignments, with the weights and schedules shown in the table in below.
Evaluation Weight Date Time
First Term Test 15% Frida d
Writing Assignment#1 5%
Third Term Test 15% Friday d
Writing Assignment#2 5%
Graded Assig rs
Final Exam 35% TBD TBD
– There will be no make-up test. If for any emergency circumstances, acceptable by the university
rules, you miss a term test, the weight will be shifted to the final exam. In case of missing a test, you
should inform me by email within two days from the test, and submit the hardcopy of your
documentations within a week of the missed test to me, or the economics department front desk.
Please do not send the scan of the documents by email. If you miss more than a term test, one will
be replaced by the final exam, and the rest will receive ZERO under ANY circumstances.
– The details of the writing assignments will be announced later on. I may decide to check your
assignments by Turnitin. The deadlines for writing assignments will not be extended, so no late
deduction is applicable. No excuses like network failure or system interruption … is acceptable. If
you miss the writing assignments, they cannot be substituted by anything else.
– The graded assignments will be posted on the course Quercus website, each covering a few
chapters, and are in multiple-choice format. Make sure you don’t miss them, by regularly checking
Quercus. If you miss them, they cannot be substituted by anything else.
– You have plenty of time to finish the writing assignments and graded assignments, but please don’t
leave them to the last minutes, as many problems including system technical problems or medical
emergencies may arise. So, no medical or health certificates are accepted for writing assignments or
graded assignments.
Emails, Quercus Messages (Inbox), and Quercus Website:
– I will use the Quercus messages (Inbox) in order to send mass emails to all students in the course.
So, it is your responsibility to check your Quercus Inbox, on a regular basis, in order to get my
messages. However, I will NOT expect to receive any contacts or messages in my Quercus Inbox.
So, I may not check it. Also, I may NOT monitor, follow, and intervene any possible students’
conversations in Quercus.
– In order to communicate with me, you must use your UofT email address and my UofT email
address (given in above). Essentially, emails are used only as the last resort, and after checking the
course outline and website announcements. I may address the issues sent by email in class, instead of
replying by email. For questions regarding the course materials you should talk to me or TA during
the office hours, class, or tutorials. In case of email, you should put the course name and section in
the subject line, otherwise I will not open your email.
– I will post all the course materials including the writing assignments instructions, graded
assignments, exercises and solutions, announcements, and other related materials in the course
Quercus. It is your responsibility to check the website, on a regular basis, to get the information.
– Notes posted on the website may not be complete. They will be completed in class. The complete
version will NOT be available. If you are expected to miss a class, please make proper arrangements
with your classmates to complete your notes.
Appeals:
For re-grading your term tests, you should submit a written request (hardcopy) including your
detailed justifications for regrading and a copy of the parts of your test paper that should be regarded
to me or the Economics Department, within 2 weeks after returning the results to students. After this
period, no request is accepted. Writing things like “I believe I should receive more partial marks
for this question” is not a good basis for re-grading. I may decide to regrade the whole test paper, so
your grade can go either way, up or down after re-grading.
Behavior and Conduct in Class:
No distraction in class will be tolerated. You are asked to leave the class if you distract the class by
talking to others, or use of electronic devices like cell phone, IPod, or any other devices.
Academic Integrity:
– Students should note that any form of academic misconduct will not be tolerated. Any student
caught engaging in such activities will be subject to academic discipline ranging from a mark of zero
on a test or examination to dismissal from the university as outlined in the academic handbook. Any
student abetting or otherwise assisting in such misconduct will also be subject to academic penalties.
All suspected cases will be reported to the Department of Economics and OSAI. Please consult with the
university’s Code of Behavior on Academic Matters:
(http://www.governingcouncil.utoronto.ca/policies/behaveac.htm).
– In order to avoid plagiarism, your assignments may be submitted to Turnitin.com. You can find the
details about what plagiarism is and how to avoid it, check this link:
http://www.utoronto.ca/academicintegrity.
onto disclaimer on Turnitin.com is applied: “Normally, students will be
required to submit their course essays to Turnitin.com for a review of textual similarity and detection
of possible plagiarism. In doing so, students will allow their essays to be included as source
documents in the Turnitin.com reference database, where they will be used solely for the purpose of
detecting plagiarism. The terms that apply to the University’s use of the Turnitin.com service are
described on the Turnitin.com web site.”
Academic Aids and Support:
– The Economics Study Center (Room GE110, open daily) is staffed by third- and fourth-year
undergraduate students who work as peer mentors and can help you with this and many other courses,
on a one-to-one basis or in study groups. Please consult with the Center’s website for place,
operation times, and other details:
http://www.economics.utoronto.ca/index.php/index/undergraduate/load/studyCentre
– In order to receive helpful information for your essays, you can use the services of several Writing
Centers can be found at
http://www.writing.utoronto.ca/writing-centres/centres.
For more general advice on academic essay-writing, please refer to:
http://www.artsci.utoronto.ca/current/advising/ell
Other Issues:
– I will follow the textbook very closely, but supplementary examples, graphs, and materials might be
discussed in class. For the tests and exam, you are responsible for all the materials that are discussed
in class.
– There might be marginal grade adjustments for the final grade of the course at the instructor’s
discretion, in terms of letter grade. In case of petition for re-grading of the final exam, the adjustment
may be revised.
Topics:
The tentative schedule of the course
Actual pace and coverage of the materials might be different
Topic Chapter Week Materials
Introduction 2 1 – 2 Macroeconomic Data and Approach
Economies in
Short Run
3 – 4 3 – 4 Goods and Financial Markets in Closed Economies
4 – 5 4 – 5 Equilibrium in Goods and Financial Markets (IS and LM Curves)
5 – 6 6 – 7 Goods and Financial Markets in Closed Economies
7 – 8 8 – 10 Equilibrium in Goods and Financial Markets in Open Economies
Economies in
Medium Run
9 – 10 11 – 13 Labor Market, Unemployment, Aggregate Demand and Supply
11 14 Aggregate Demand and Supply under Liquidity Trap
12 – 13 15 – 16 Phillips Curve, Money Growth, Inflation, and NAIRU
14 17 Exchange Rate, Adjustments, Crises, Regimes, Credibility
Economies in
Long Run
15 – 16 18 – 20 Economic Growth: Stylized Facts, Saving, Capital Accumulation,
and Output Growth.
17 21 Technological Progress, and Economic Growth
Expectations
and Economic
Policies
19 & 21 22 – 24 Expectations, Real Interest Rate, Consumption, and Investment