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NUS Business School
National University of Singapore
BMA5011
Macroeconomics in the Global Economy
Semester 1, AY2014/2015
Instructor: Prof. Kim Sun Bae (bizsbk@nus.edu.sg)
Teaching Assistant: Zhou Yingke (a0059199@nus.edu.sg)
Course objective
This course has two objectives.
The first is to introduce MBA students to the basic tools (“core models”) of macroeconomics and
international economics. The course begins with the short run analysis of business cycle dynamics
(how output, employment, interest rate and price are determined) and the role of stabilization
policy. It then moves on to the long run analysis of what drives economic growth. The final
segment of the course extends these analyses to the open economy. Key issues covered here
include the determination of exchange rate in the short- and the long run, the effectiveness of
monetary and fiscal policy under high capital mobility, how economic “shocks” are transmitted
internationally and what policy can achieve in response.
The second objective of the course is to link the basic insights of the “core models” to “real life” or
case studies, with special focus on Asia. The aim here is to demonstrate that economics can be a
powerful tool to understand and, possibly anticipate, key macroeconomic events and
developments and their feedback mechanism to policy and financial markets.
How to Do Well and Get the Most out of this Course
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This course covers a lot of ground
- Course materials often builds cumulatively
- Difficult to cram last minute
Work smartly and efficiently: “Preview”, “Review”, “Do”
“Preview” lecture notes
- Keep sight of the “big picture”
- Keep track of the roadmap--where we came from, where we’re going
- You’ll get a lot more out of the lectures having previewed the material
- This will be especially important for those lectures not covered in textbook
“Review” lecture notes
- This will help cement your understanding
“Do”
- Get your hands dirty with problem sets
- Read supplementary material
- Ask questions
This is an “applied” course
- That is why we do “case studies”
- You will be expected to be able to apply macro thinking/analysis to real life cases
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Tutorials
Schedule to be announced.
Office Hours (BIZ1 #6-7)
 Mondays and Thursdays, 3-5pm, or by appointment
 In either case, please give me a heads up by e-mail at least a day in advance
Assessment method
 Class participation (15%)
 Assignments (15%)
 In-class exams (70%)
o Exam 1 (30%): Feb. 17, 2014
o Exam 2: (40%): Apr. 14, 2014
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Please be aware:
o Plagiarism and other forms of academic transgression will be dealt with sternly…
o …As they have been in the past
Required text
 Olivier Blanchard, Macroeconomics, Global Edition 6/E (2013), Pearson
Other reading
A significant part of the materials covered in this course is not covered in textbooks. I have
therefore compiled a set of reading materials culled from a wide range of sources,
including:
 Financial press
 Investment bank and fund management research
 Economics and finance blogs
 Academic journals
 Central bank research
 International organization (e.g. IMF, BIS, ADB)
Students are encouraged to read the assignment materials (as well as the lecture notes)
before each lecture.
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Schedule
Week 1 (Aug. 14)
1. Course Introduction
2. Business Cycles: Background
3. Keynesian Multiplier Model
Week 2 (Aug. 21)
4. IS-LM Model: Part 1
5. IS-LM Model: Part 2
Week 3 (Aug. 28)
6. Aggregate Demand—Aggregate Supply Model: Part 1
7. Aggregate Demand—Aggregate Supply Model: Part 2
Week 4 (Sep. 4)
8. The Great Recession
9. Fiscal Policy
Week 5 (Sep. 11)
10. Monetary Policy
11. Inflation
Week 6 (Sep. 18)
12. Growth Accounting
13. Perspectives on Asia’s Growth
Recess Week (Sep. 20-28)
Week 7 (Oct. 2): Mid-term
Week 8 (Oct. 9)
14. Neoclassical Growth Model
15. The Rise of BRICs
Week 9 (Oct. 16)
16. Exchange Rate in the Short Run
17. Mundell-Fleming Model & International Transmission of Shocks
Week 10 (Oct. 23—reschedule?)
18. Exchange Rate in the Long Run
19. Policies for Internal & External Balance & Global Imbalance
Week 11 (Oct. 30)
20. Real Exchange Rate Adjustments
21. Twin Crisis
Week 12 (Nov. 6)
22. Singapore exchange rate policy framework
23. International Monetary System & Optimal Exchange Rate Regime
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Week 13 (Nov. 13):
24. Review
25. Taking Stock of Macro
Nov. 20: In-class final Exam