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INTRODUCTION:

We warmly welcome you to this course: ECON 2003-Intermediate Macroeconomics II!! We do
hope that you are enthusiastic and committed to hard workall of which will ensure your
success in this course. This course offers you the opportunity to advance your knowledge and
application of macroeconomic theory. You MUST attend all lectures and tutorial sessions.
Follow a routine that suits you best and this will prove to be a manageable and intellectually
rewarding experience. Please remember that we are always willing to assist you throughout your
journey, do not hesitate to contact us either via email or during office hours. Good luck and hope
you enjoy this course!

COURSE DESCRIPTION:

This is the final component of a two (2) part series on Macroeconomics. Intermediate
Macroeconomics II covers the additional standard topics of mainstream macroeconomics. Topics
include: Open economy analysis, Economic Growth, Consumption, Investment, Money Supply
and Demand and Business Cycle Theory. The course offers in-depth information on these key
macroeconomic issues. In the context of the open-economy, the Mundell-Fleming model is
discussed, expanding the discussion of the IS-LM model (introduced in part one (1)). The issue
of economic growth is analyzed with the use of the Solow Model. The other topics such as,
consumption and investment are highlighted through the use of various models. The course is
enhanced through the use of graphical representations and mathematical applications. Delivery
of the course material is done through lectures and complementary tutorial sessions.


PURPOSE OF THE COURSE:

This course is designed to deepen students understanding of modern mainstream macroeconomic
theory and methods. It allows students to gain an appreciation of how economists use particular
models in attempting to understand economic activity.
COURSE INFORMATION
Course Code ECON 2003
Course Title Intermediate Macroeconomics II
Level 2
Semester 2 (January-May 2014)
Credits 3
Pre-requisite(s) ECON 1001and ECON 1002
Main Lecturer Dr. Lester Henry
Lecturers/Instructors Dr. Kevin Williams
Mr. Diedron Lewis
Teaching Assistant Ms. Cassandra Rattan
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TEACHING STRATEGIES:

The course delivery will take the form of a weekly lecture supported by a weekly tutorial. The
two (2) hour lectures will be delivered via PowerPoint presentations, which correspond to the
chapters covered in the main textbook. The lecturer encourages student participation during
classroom discussions and welcomes feedback from students.

LECTURER DAY TIME ROOM
Dr. Lester Henry Monday 10-12 noon TLC
1
LTB; TLC LTC
Mr. Diedron Lewis Wednesday (EU) 5-7pm FSS MLT
Dr. Kevin Williams Thursday 10-12 noon FSS 103

The one (1) hour tutorial classes will be based on tutorial sheets, which will be accessed via
myelearning. Tutorial sign-up will be available on myelearning. Tutorials are meant to reinforce
key concepts covered in lectures. Tutorial attendance is mandatory for ALL students. University
regulations allow for students to be debarred from final examinations, if they do not attend at
least 75% of tutorial classes. Student attendance will be monitored regularly to ensure that the
regulation is enforced.


INSTRUCTOR INFORMATION:

Lecturers Email Office Hours
Dr. Lester Henry Lester.Henry@sta.uwi.edu Monday 2-4pm
Thursday 2-4pm
(Room 214)
Dr. Kevin Williams Kevin.Williams@sta.uwi.edu To be announced
Mr. Diedron Lewis Diedron.Lewis@sta.uwi.edu To be announced

Teaching Assistant Email Office Hours
Ms. Cassandra Rattan Cassandra.Rattan@sta.uwi.edu -


COURSE ASSESSMENT:

Mid-term Examination: 20%

Final Examination 80%

The final exam usually consists of four (4) questions. It is a combination of short notes,
theoretical and calculation and/or graphical questions. The duration is 2 hours.


1
TLC refers to the New Teaching and Learning Complex
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COURSE CONTENT:


I. OPEN-ECONOMY MACROECONOMICS:

The Open Economy (Chapter 5: N.G. Mankiw, 2010)
o The international flows of capital and goods
o Saving and investment in a small open economy
o Exchange rates

The Open Economy Revisited: The Mundell-Fleming Model and the Exchange-Rate
Regime. (Chapter 12: N.G. Mankiw, 2010)
o The Mundell-Fleming Model
o The Small Open Economy under Floating Exchange Rates
o The Small Open Economy Under Fixed Exchange Rates
o Interest- Rate Differentials
o Should Exchange Rates Be Floating or Fixed?
o From the Short Run to the Long Run: The Mundell- Fleming Model with a
changing Price level
o A Short Run Model of the Large Open Economy


II. ECONOMIC GROWTH:

Economic Growth I (Chapter 7: N.G. Mankiw, 2010)
o The Accumulation of Capital
o The Golden Rule Level of capital
o Population Growth

Economic Growth II (Chapter 8: N.G. Mankiw, 2010)
o Technological Progress in the Solow Model
o From Growth Theory to Growth Empirics
o Policies to Promote Growth
o Beyond the Solow Model: Endogenous Growth Theory
o Accounting for the sources of Economic Growth


III. MICROECONOMICS BEHIND MACROECONOMICS:

Consumption (Chapter 17: N.G. Mankiw, 2010)
o John Maynard Keynes and the Consumption Function
o Irving Fisher and Intertemporal Choice
o Franco Modigliani and the Life-Cycle Hypothesis
o Milton Friedman and the Permanent Income Hypothesis
o Robert Hall and the Random-Walk Hypothesis

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Investment (Chapter 18: N.G. Mankiw, 2010)
o The Neo-classical model of Business Fixed Investment
o Inventory Investment

Money Supply and Money Demand (Chapter 19: N.G. Mankiw, 2010)
o A simple Money Supply Model
o The Baumol-Tobin Money Demand model

Advances in Business Cycle Theory (Chapter 19: Mankiw (6
th
Edition))
o Theory of Real Business Cycles
o New Keynesian Economics


GOALS/AIMS:

This course aims to ensure that students are knowledgeable and competent in macroeconomic
theory and its application.


GENERAL OBJECTIVES:

1. To make the course student-friendly and ensure the information is conveyed in a simple
and comprehensive manner.
2. To demonstrate the relevance of macroeconomics and its practical (real world)
applications.
3. To enhance students understanding of macroeconomic concepts and techniques.
4. To ensure students know the main theories (e.g. Mundell-Fleming model) and their
graphical and mathematical representations.
5. To lay the theoretical foundation for further work at third year and at the graduate level.


RESOURCES:

MAIN TEXTBOOK:

N. Gregory Mankiw (2010). Macroeconomics, 7th Edition, New York: Worth Publishers.
(www.worthpublishers.com/mankiw)

SOME 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.

Students can also read other macroeconomics textbooks that are available online or at the library.

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DEPARTMENTAL EVENTS:

1. Attendance at Demas/Rampersad Seminar Series: students can refer to the Departmental
website and announcements will be made in class.

IMPORTANT POLICIES:

REGULATIONS:

Please refer to the Examinations Booklet (available online) for information on the following
regulations:
General Examination Regulation:
19. Any candidate who has been absent from the University for a prolonged period during
the teaching of a particular course for any reason other than illness or whose attendance
at prescribed lectures, classes, practical classes, tutorials, or clinical instructions has
been unsatisfactory or who has failed to submit essays or other exercises set by his/her
teachers, may be debarred by the relevant Academic Board, on the recommendation of
the relevant Faculty Board, from taking any University examinations. The procedures to
be used shall be prescribed in Faculty Regulations.
Cheating

97. (i) Cheating shall constitute a major offence under these regulations.
(ii) Cheating is any attempt to benefit ones self or another by deceit or fraud.
(iii) Plagiarism is a form of cheating.
(iv) Plagiarism is the unauthorized and/ or unacknowledged use of another persons
intellectual effort and creations howsoever recorded, including whether formally
published or in manuscript or in typescript or other printed or electronically
presented form and includes taking passages, ideas or structures from another work
or author without proper and unequivocal attribution of such source(s), using the
conventions for attributions or citing used in this University.

103. (i) If any candidate is suspected of cheating, or attempting to cheat, the circumstances
shall be reported in writing to the Campus Registrar. The Campus Registrar shall refer
the matter to the Chairman of the Campus Committee on Examinations. If the Chairman
so decides, the Committee shall invite the candidate for an interview and shall conduct
an investigation. If the candidate is found guilty of cheating or attempting to cheat, the
Committee shall disqualify the candidate from the examination in the course concerned,
and may also disqualify him/her from all examinations taken in that examination session;
and may also disqualify him/her from all further examinations of the University, for any
period of time, and may impose a fine not exceeding Bds$300.00 or J$5000.00or
TT$900.00 or US$150.00 (according to campus). If the candidate fails to attend and does
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not offer a satisfactory excuse prior to the hearing, the Committee may hear the case in
the candidates absence.


ADDITIONAL INFORMATION:
LECTURERS IN-CLASS RULES:
Please turn off or switch your mobile phones to vibrate or silent modes during classes.
Please pay attention and ask questions whenever you are unsure about a topic that is
being taught (do not wait until the last minute to make your concerns known).
Please refrain from any distracting behavior or activities during class time.

HOW TO APPROACH THIS COURSE:

1. Attend ALL lectures. Please dont disregard the importance of these sessions!
2. Read the required chapters BEFORE class and ensure you understand the course
material.
3. Ask questionsdont be afraid to approach the lecturers or tutors to address any
concerns you may havewere here to assist you!
4. Attend tutorials and attempt ALL questionsthis is a way to personally assess whether
you understand what is being taught in lectures.
5. Attempt past paper questions after the completion of each topicthis helps you become
more familiar with the material and the requirements of the exam. Practice makes perfect!
6. Always begin studying earlydont procrastinate!


COURSE SCHEDULE:


WEEK TOPICS
1 Introduction to the course: course overview, requirements.
2 The Open Economy
3-4 The Open Economy Revisited: The Mundell-Fleming Model
5 Economic Growth I
6 Economic Growth II
7 Mid-term (DATE TO BE CONFIRMED)
8 Consumption
9 Investment
10 Money Supply and Money Demand
11 Advances in Business Cycle Theory
12 Final Lecture
13 Review/Exam Discussion