Macroeconomics

This subject has the following teaching availabilities in 2015:

Estimated total time commitment of 120 hours per semester

A major sequence in economics will normally be required before this subject is taken.

Completion of 100 points in the Master of Economics

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For the purposes of considering requests for Reasonable Adjustments under the Disability Standards for Education (Cwth 2005), and Students Experiencing Academic Disadvantage Policy, academic requirements for this subject are articulated in the Subject Description, Subject Objectives, Generic Skills and Assessment Requirements for this entry.

The University is dedicated to provide support to those with special requirements. Further details on the disability support scheme can be found at the Disability Liaison Unit website: http://www.services.unimelb.edu.au/disability/

This is an advanced course in macroeconomic theory, with the intention of introducing students to frontier techniques. Topics may include: techniques of dynamic optimization, dynamic optimization theory, economic growth, optimal taxation, unemployment, and money.

On successful completion of this subject, students should be able to:

• Solve first-order and second-order ordinary differential equations and apply these solutions to explain possible macroeconomic outcomes;
• To apply basic dynamic techniques to macroeconomic models in order to solve for short-run and long-run outcomes;
• To apply the techniques of static and dynamic optimisation to solve macroeconomic problems including, in particular, to solve the intertemporal problem of the representative firm and to solve the intertemporal problem of the optimising consumer;
• To integrate the model of the representative firm and the optimising consumer into a representative agent model of the economy;
• To apply standard dynamic techniques to growth theory models.

• 3-hour end-of-semester examination (50%)
• Four 500-word assignments (5% each) due in weeks 4, 7, 10 and 12 and
• 1.5 hour mid-semester examination (30%)

You will be advised of prescribed texts by your lecturer.

This subject is not available as a breadth subject.

On successful completion of this subject, students should have improved the following generic skills:

• The use of dynamic macroeconomic models;
• The explanation of likely economic outcomes in the short-run, in the long-run and in the transition from short-run to long-run equilibria;
• The use of optimisation techniques to derive theoretical models that can explain the behaviour of economic agents;
• The integration of theoretical models based on optimising behaviour into full-scale models of the macro-economy;
• The improvement of problem solving skills, through completing class assignments.