ECONOMICS 450

ADVANCED MACROECONOMICS
Wilfrid Laurier University
WINTER 2016
Instructor: P. Siklos, BSIA 341 (Balsillie School CIGI Campus)
Phone: 226-772-3159.
For e-mail use My Learning Space : https://mylearningspace.wlu.ca/.
NOTE: I will not respond to e-mail sent to my WLU account.
Class Location: SBE1240, Monday 2:30-5:20.
OFFICE HOURS & TEXT: Tuesdays, 8:30-11:00AM, unless otherwise noted.
Exceptions will be noted in advance on My Learning Space. Please check on a
regular basis.
Wendy Carlin and David Soskice (2015), Macroeconomics: Institutions, Instability
& the Financial System (Oxford: Oxford University Press). If you have purchased the
book there are some useful online resources.
Go to http: http://global.oup.com/uk/orc/busecon/economics/carlin_soskice/.
EVALUATION:
First mid-term
Second mid-term
Take home exam

Monday, January 25, 2016

Monday March 7, 2016
Distributed April 7, 2016;
DUE no later than 4PM, April 11,
2016
on My Learning Space

(2 hours)
(2 hours)
NA

No other forms of submission are permitted.

NOTE: more detailed instructions can be found at the end of this outline.

25%*
45%*
30%

_________________________________________________________________________________________________
IMPORTANT: If the first mid-term exam is missed for a documented medical
reason the second mid-term will count for 70% as the course material is
cumulative. It is NOT possible to shift any mid-term mark to the take-home exam.
You will not be permitted to write a 100% exam. There are NO deferred mid-term
exams.
Students have a ONE WEEK window to let me know, in writing (via email on MyLS
ONLY) the reason they missed the mid-term exam.
Complaints about marks need to be explained in writing within one week of receiving
that mark. Discussions regarding marking will not be entertained after class. I will
not review marks after April 20, 2015. After that date, you have to lodge an official
grade appeal. Forms and procedures for a grade appeal are at
http://legacy.wlu.ca/calendars/section.php?cal=1&s=442&sp=1463&ss=1888&y=49
#Grade_R eassessment.
__________________________________________________________________________________________________
Academic and Research Misconduct
Wilfrid Laurier University uses software that can check for plagiarism.
Students may be required to submit their written work in electronic form
and have it checked for plagiarism.
You are reminded that the University will levy sanctions on students who are
found to have committed, or have attempted to commit, acts of academic or
research misconduct. You are expected to know what constitutes an academic
offense, to avoid committing such offenses, and to take responsibility for your
academic actions. For information on categories of offenses and types of
penalty, please consult the relevant section of the Undergraduate Academic
Calendar. If you need clarification of aspects of University policy on Academic
and Research Misconduct, please consult your instructor.

Accessible Learning
Students with disabilities or special needs are advised to contact Lauriers
Accessible Learning Centre for information regarding its services and
resources.
Students are encouraged to review the Calendar for
information regarding all services available on campus.

SPECIAL NEEDS: Students with disabilities or special needs are advised to contact
Lauriers Accessible Learning Office for information regarding its services and
resources. Students are encouraged to review the Calendar for information
regarding all services available on campus.
Senate Approved Policy on Classroom Use of Electronic Devices
http://www.wlu.ca/documents/50202/9.3_Electronic_Device_Policy.pdf
Mobile Devices in the Classroom: Mobile devices, specifically laptops and tablets
may be used in this course for educational purposes only (i.e., learning directed
related to the course). Those who choose to use such devices, except for accessibility
reasons, are asked to sit at the back of the room. Use of all other mobile devices is not
permitted in class. Off-task use (e.g., Facebook, texting, other) will result in your
device being confiscated for the class and/or being asked to leave the classroom for
all or part of the class or course.

COURSE OBJECTIVES
The course aims to prepare students who wish to go on to graduate school. You will
receive a firm grounding in the consensus model that is developed in most
macroeconomics courses. However, those who do not plan to go on will also learn
about some of the some of the major ongoing debates about the state of
macroeconomics and select areas where the consensus model appears to fail as an
adequate description of business cycles and the role of monetary policy.
The first part is a review. For the first week of classes you are expected first to read
chapters 1 through 4 of the text on your own. Additional office hours will substitute
for the first regular meeting. A lecture summarizing the review material will be held
the second week. All concepts will have been covered in earlier macroeconomics
courses although the basic framework used in macroecomnomic analysis today will
not have been developed in such a comprehensive manner.
The second part extends the closed economy model to the open economy followed by
a discussion of monetary and fiscal policy. Dynamics are also considered. This part of
the course is considerably more challenging than the review portion.
The final part of the course delves into greater detail into areas that are only
superficially covered in the first two parts of the course or are largely ignored in
model construction and analysis.
COURSE SCHEDULE
(NOTE: adjustments may be made except for mid-terms as needed)
Date
Material
POWER POINT SLIDES AND SOLUTIONS TO CHECKLIST QUESTIONS AND
PROBLEMS WILL BE POSTED ONLINE IN ADVANCE FOR CHAPTERS 1 THROUGH
4 ONLY. THEREAFTER, THESE MATERIALS WILL BE POSTED AFTER EACH
CHAPTER OR SECTION IS COMPLETED THE DAY AFTER THE LECTURE
January 4, 2016 NO LECTURE: Review: C&S, Chapters 1 through 4
REGULAR OFFICE HOURS THAT WEEK REPLACED WITH EXTRA
HOURS,
THURSDAY
JANUARY
7,
2:30-4:30PM
& FRIDAY JANUARY 8, 8:30-10:30AM)
January 11,
C&S Chapters 1 through 4, lecture, Q&A
2016
January 18,
Q&A on reviews section (1/2 hour MAX) followed by
2016
The Open Economy: C&S Chapters 9 through 11
January 25,
MID-TERM I: C&S CHAPTERS 1 THROUGH 4 ONLY
2016
IN CLASS (2 HOURS)
February 1,
The Open Economy (contd): C&S Chapters 9 through 11

2016
February 8,
2016
February 22,
2016
February 29,
2016
March 7, 2016
March 14, 2016
March 21, 2016
March 28, 2016
April 7, 2016

The Open Economy (contd): C&S Chapters 9 through 11

February 15-19, 2016: READING WEEK
C&S Chapter 12
C&S Chapters 13 and 14
MID-TERM II: C&S CHAPTERS 9 to 11, 12, 13 and 14
IN CLASS (2 HOURS)
TOPIC I: CENTRAL BANK INDEPENDENCE & TRANSPARENCY**
TOPIC II: TRIALS and TRIBULATIONS OF THE EUROZONE***
TOPIC III: THE STANCE OF MONETARY POLICY AND
QUANTITATIVE EASING
TAKE-HOME EXAM: MATERIAL FROM
2nd MID-TERM ON ONLY
EXCLUSIONS APPENDICES

Other than the appendices 1.4.2, 10.5, and 11.4, ALL other appendices are useful
companions to the material covered in class.
TOPICS READINGS
For each one of the topics you are assigned up to 3 readings you are responsible for.
The material subject to exam questions will be rounded out by lectures and power
point slides.
NOTE: Power point slides may not include all the material that is discussed in class.
Questions on the take-home final will be based on lectures and the readings. These
are all available online. If the URL or other link provided below does not work (these
were checked early December 2015) then you can obtain them online via online
library sources (Econ Lit, SSRN or Repec).
**
Tom Cargill (2013), A Critical Assessment of Measures of Central Bank
Independence,
Economic
Inquiry
51
(January):
260-72,
https://ideas.repec.org/a/bla/ecinqu/v51y2013i1p260-272.html.
Michael Parkin (2012), Central Bank Laws and Monetary Policy Outcomes: A Three
Decade Perspective, available from
http://ideas.repec.org/p/uwo/epuwoc/20131.html.
Nergiz Dincer, and Barry Eichengreen (2014), Central Bank Transparency and
Independence: Updates and New Measures, International Journal of Central Banking
(March) http://www.ijcb.org/journal/ijcb14q1.htm.

***
Lars Jonung and Eoin Drea (2010), It Cant Happen, Its a Bad Idea, It Wont Last: U.S.
Economists on the EMU and the Euro, 1989-2002, Econ Journal Watch 7 (January):
4-52, http://ideas.repec.org/a/ejw/journl/v7y2010i1p4-52.html
European Central Bank (2012), Monetary and Fiscal Policy Interactions in a
Monetary
Union,
Monthly
Bulletin,
July:
51-64,
https://www.ecb.int/pub/pdf/mobu/mb201207en.pdf
Jay Shambaugh (2012), The Euros Three Crises, available from
http://www.brookings.edu/~/media/projects/bpea/spring2012/2012a_shambaugh.pdf.

Reinhart, Carmen and Kenneth Rogoff (2013), Financial and Sovereign Debt Crises:
Some Lessons Learned and Those Forgotten, IMF working paper 13/266, December,
https://www.imf.org/external/pubs/ft/wp/2013/wp13266.pdf.
Brett Fawley and Christopher Neely (2013), Four Stories of Quantitative Easing,
Review of the Federal Reserve Bank of St. Louis (January/February): 51-88,
https://research.stlouisfed.org/publications/review/13/01/Fawley.pdf.
Alex Nikolsko-Rzhevskyy, David Papell, and Ruxandra Prodan (2015), Policy Rule
Legislation in Practice, available from SSRN,
http://dx.doi.org/10.2139/ssrn.2697168.
TAKE-HOME EXAM
You will be asked to answer 5 short essay type questions out of 8 on the exam that
will be posted April 7, 2016 by 10AM.
You are expected to provide an answer that does not exceed 2 pages, is written in a
font that is NO smaller than 10 pt with a margin NOT narrower than 1 (2.5cm)
and a minimum spacing of 1.5.
Any violation of these resrictions will result in a loss of marks (10% for a font that is
smaller than the minimum acceptable one; another 10% for margins that are
narrower than the minimum acceptable standard; another 10% is spacing is smaller
than 1.5).