Lahore University of Management Sciences

ECON 521– Macroeconomic Analysis

Spring 2018

Instructor SYED ZAHID ALI

Room No. 247
Office Hours TBA
Email szahid@lums.edu.pk
Telephone 35608074
Secretary/TA Khalid Pervaiz: khalidp@lums.edu.pk
TA Office Hours
Course URL (if any)

Course Basics
Credit Hours 4
Lecture(s) 2 Per Week Duration 100 minutes
Recitation/Lab (per week) NA Duration
Tutorial (per week) 1 Per Week Duration 100 minutes

Course Distribution
Core yes
Elective
Open for Student Category M.Sc
Close for Student Category B.Sc

COURSE DESCRIPTION
This course provides an advanced coverage of contemporary macroeconomics.

Specifically, the course studies:

 Major debates on issues such as economic fluctuation and stabilization policies

 Forward looking models and implications of monetary and fiscal policies
 Theories of inflation and unemployment
 Business cycle theories

COURSE PREREQUISITE(S)

 B.Sc
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

COURSE OBJECTIVES
understand the success and failure of price mechanism;

understand significant developments in macroeconomic theories;

 be able to develop and solve more challenging macro-models;
be familiar with the important controversies about monetary and fiscal policy;

Learning Outcomes
 Lahore University of Management Sciences




Grading Breakup and Policy

Assignment(s): 10%
Home Work: 0%
Quiz(s): 20%
Class Participation:0%
Attendance: 0%
Midterm Examination: 30%
Project: 0%
Final Examination: 40%

Examination Detail

Yes
Combine Separate: combine
Midterm
Duration: 100 minutes
Exam
Preferred Date: none
Exam Specifications: closed book/closed notes

Yes/No: Yes
Combine Separate: combine
Final Exam
Duration: 100 minutes
Exam Specifications: closed book/closed notes

COURSE OVERVIEW
Recommended Objectives/
Week/ Lecture/ Module Topics
Readings Application

Session – 1
Week 1 Stability Analysis
Session – 2 Scarth, ch. 2, 5
Implications of Uncertainty and Romer, ch.5
Nonlinearities

Session – 1
Adaptive Expectations and
Week 2 Monetary Instrument Questions
Session – 2 Scarth, ch. 4
Cagan’s Convergence Romer, ch.6
Requirement and effectiveness of
Fiscal and Monetary policies

Quiz - 1
Week 3
Session – 1
 Lahore University of Management Sciences
Session – 2 Rational Expectations and Lucas Scarth, ch. 5
Critique

Session – 1
Week 4
Session – 2 Rational Expectations: Current Scarth, ch. 6
Controversies Romer, ch.6

Session – 1 Quiz - 2

Scarth, ch. 9
Week 5
Session – 2 Open Economy Macroeconomics Romer, ch.5

Mid-Term
Week 6
Session – 1 Supply side Effects of Exchange
Rate and Exchange Rate Scarth, ch. 9
Session - 2 Expectations

Week 7
Session – 1
Incomplete Nominal Adjustment Romer ch. 6
Session – 2 Scarth ch. 10

Week 8 Quiz - 3

Session – 1
Theories of Unemployment Scarth ch. 10
Session – 2 Romer ch.9
Week 9

Session 1 Real Business Cycle Theories Scarth ch. 11

Romer ch. 4
Session 2
Week 10

Session 1
Growth Theories Scarth ch. 11
Session 2 Romer ch. 1,2, 3

Textbook(s)/Supplementary Readings
Evans, G. W., and S. Honkapohja. Learning and Expectations in Macroeconomics, Princeton University Press, 2001
Froyen T. R and A .V. Guender, Optimal Monetary Policy Under Uncertainty, Edward Elgar Publishing, 2008

Scarth, M.W., Macroeconomics: An Introduction To Advanced Methods, 3 rd edition, McMaster University, Hamilton, Ontario,
 Lahore University of Management Sciences
Canada, 2009