THE UNIVERSITY OF THE WEST INDIES
ST. AUGUSTINE
FACULTY OF SOCIAL SCIENCES
DEPARTMENT OF ECONOMICS
COURSE OUTLINE 2010
SEMESTER II (JANUARY – MAY 2010)
COURSE TITLE: INTERMEDIATE MACROECONOMICS II
COURSE CODE: ECON 2003
LEVEL: UNDERGRADUATE LEVEL (SEMESTER 2)
NO. OF CREDITS: 3
PREREQUISITES: INTRODUCTION TO ECONOMICS 1 AND 2
LECTURER: DR. LESTER HENRY
LECTURER’S EMAIL: lester.henry@sta.uwi.edu
LECTURER’S PHONE CONTACT: EXT 3044
ROOM: 214 SSB
OFFICE HOURS: MONDAYS & THURSDAYS- 2.00- 4.00 PM
OBJECTIVE:
To introduce students to the remaining standard topics of mainstream macroeconomics in
the context of the open economy, economic growth, consumption and investment.
COURSE DESCRIPTION/ RATIONALE:
This is the second semester of a two (2) semester sequence on Macroeconomics. This
semester we will cover the remaining standard topics of mainstream macroeconomics.
Also, there will be coverage of alternative approaches and some reading on the Caribbean
Macro-economy. First, macroeconomics in the context of the open-economy is
discussed. Second, we examine the issue of economic growth. Further topics such as
consumption and investment are studied in detail. This course is designed to deepen your
understanding of economic theory and methods.
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2010 January.
TEACHING METHODOLOGY:
This will take the form of a weekly Lecture supported by a weekly tutorial. Tutorial
sheets will be accessed on my elearning.
Lecture Hours: Monday 10- 12pm (Lester Henry)
: Wednesday 5-7pm (Dr. Annmarie Mohammed)
Location: FSS 107
Tutorial Hours: a sign up sheet will be provided in the economic office
Course Assessment: end of semester examinations: 100%
Recommended Text:
N. Gregory Mankiw (2007) Macroeconomics, 5th Edition, New York: Worth Publishers.
(www.worthpublishers.com/mankiw)
Other Useful texts: (1) Dornbusch and Fischer, Macroeconomics (4th or later edition)
(2) Abel, A. and Bernanke, B. S. (2001) Macroeconomics, 4th
Edition, New York: Addison Wesley.
There will also be a number of required readings, which will be distributed as the
semester progresses.
LECTURE SESSIONS AND DESCRIPTIONS:
Topics
Economic Growth
Chapter
5. The Open Economy
• The international flows of capital and goods
• Saving and investment in a small open economy
• Exchange rates
• Appendix: The large open economy
12. Aggregate Demand in the Open Economy
• The Mundell- Fleming Model
• The Small Open Economy under Floating Exchange Rates
• The Small Open Economy Under Fixed Exchange Rates
• Interest- Rate Differentials
• Should Exchange Rates Be Floating or Fixed?
• From the Short Run to the Long Run: The Mundell- Fleming Model with a
changing Price level
• A Short Run Model of the Large Open Economy.
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Lester Henry
2010 January.
Open-Economy Macroeconomics
Chapter
7. Economic Growth I
• The Accumulation of Capital
• The Golden Rule Level of capital
• Population Growth
8.
Economic Growth II
• Technological Progress in the Solow Model
• From Growth Theory to Growth Empirics
• Policies to Promote Growth
• Beyond the Solow Model: Endogenous Growth Theory
• Accounting for the sources of Economic Growth
Microeconomics behind Macroeconomics
Chapter
16. Consumption
• John Maynard Keynes and the Consumption Function
• Irving Fisher and Intertemporal Choice
• Franco Modigliani and the Life- Cycle Hypothesis
• Milton Friedman and the Permanent Income Hypothesis
• Robert Hall and the Random- Walk Hypothesis
17. Investment
• The neo-classical model of Business Fixed Investment
• Inventory Investment
18. Money Supply and Money Demand
• A simple Money Supply Model
• The Tobin-Baumol Money Demand model
Alternative Views on Macroeconomics (readings to be assigned)
Chapter
19. New-Keynesian
New Classical
Others
• The Theory of Real Business Cycles
• New Keynesian Economics
Relevant examples and case studies will be done using local and regional data
Readings in Caribbean Macroeconomics (readings to be assigned)
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2010 January.