Department of Economics
ECON 411.3 (02)
|Time:||Tuesday and Thursday 13:00-14:20
|Prerequisites:||ECON 214 and a junior course in calculus
Please note: A decent background in math and statistics (as conveyed in ECON 306 and ECON 304)
will be an asset.
|Course Description:||An examination of recent developments in the field of monetary theory. Topics
include market-clearing and non-market-clearing models of business cycle fluctuations, rational
expectations, the policy ineffectiveness debate, and the time inconsistency of optimal policy.
|Website:||Some materials will be available on Canvas.
Expected Learning Outcomes
This course introduces various ways of modelling monetary economies. It is designed to prepare students for graduate-level macroeconomics.
Upon successful completion, students will have a good knowledge and understanding of the nature and role of money as well as the effects of
monetary policy. They will be familiar with a number of important macroeconomic concepts, including dynamic general equilibrium models with
infinitely lived households and overlapping generations, rational expectations, the Phillips Curve, and the New Keynesian framework.
|Andreas Pollak||Phone: 966-5221|
|Arts 812||E-mail: email@example.com (preface subject with "ECON411")|
|Office Hours:||Tuesday and Thursday, 14:30-15:15, or by appointment
There will be biweekly tutorial sessions starting in week 2 or 3 of the term. Further details will be announced at the beginning of the term.
Attendance is optional, but recommended.
In the tutorials, a teaching assistant will discuss assignments, solve problem sets, assist
you in practicing for exams and answer your questions.
Assignments will typically be returned during these tutorial sessions,
although other arrangements are possible for students not planning to attend.
Course Outline and Readings
Most of the material is covered in:
Champ, Freeman and Haslag: Modeling Monetary Economies, fourth edition. Cambridge:
Cambridge University Press, 2016. [referred to as CFH below]
Please note that the second edition of this book, which is almost identical to the current one, is
available online through the library at https://ebookcentral.proquest.com/lib/usask/detail.action?docID=202238
Where the second-edition chapter numbers are different, they are provided as [CFH2: xx].
Links to the other required readings will be posted on online.
Additional references that are potentially of interest include:
Obstfeld and Rogoff: Foundations of International Macroeconomics, Cambridge, MA:
MIT Press, 1996. [OR]
Handa: Monetary Economics, 2nd edition, London: Routledge, 2009. [Handa]
|2.||Money as a Store of Value|
CFH, Chapters 1, 2, 16 and 4 [CFH2: 1, 14, 3]
OR, Chapter 8.2
Handa, Chapters 21, 22.1
|3.||Money as a Medium of Payment|
OR, Chapter 8.3.1-8.3.6
Handa, Chapters 3.3-3.14, 23.1-23.2
|4.||Money and Other Assets|
CFH, Chapters 7, 3.5 and 11 [CFH2: 6, 2, 10]
OR, Chapter 8.7
Handa, Chapter 22.2-22.4
|5.||The Government and Monetary Policy|
CFH, Chapters 15, 17 and 18 [CFH2: 13, 15, 16]
CFH, Chapter 6 [CFH2: 5]
Handa, Chapter 22.5
Wallace, Neil, 1992: “Lucas's signal-extraction model: A finite state exposition with
aggregate real shocks,” Journal of Monetary Economics, Elsevier, vol. 30(3),
pages 433-447, December.
Richard Clarida & Jordi Gali & Mark Gertler, 1999: “The Science of Monetary
Policy: A New Keynesian Perspective,” Journal of Economic Literature,
American Economic Association, vol. 37(4), pages 1661-1707, December.Handa, Chapter 15.4
|8.||Money and Search|
Williamson (1999): "Notes on Macroeconomic Theory", Chapter 8
Required readings for each topic are printed in bold font.
The course outline and reading list are preliminary and may be updated during the term.
There will be three components to your grade:
|Midterm Exam||March 3||25%|
The weight of the midterm or assignment component will be shifted to the final if this results in a better overall grade.
|Assignments:||You will complete a number of assignments (approx. 4 to 5) during the term. If you receive help from any source (book, another person, website) you must acknowledge it on your assignment. Failure to do so may constitute academic misconduct. You will have at least one week to complete each assignment. While you are encouraged to cooperate solving the assignments, I expect the answers that are handed in to reflect students’ individual contributions. Late assignments will not be accepted. Answer keys will be posted online, and the assignments will be discussed in the tutorials.
There will also be a similar number of “problem sets,” which are comprised of
practice questions similar to assignments. Just as assignments, the problem sets
will be discussed in the tutorials and answer keys will be posted online. Even
though they are not handed in and graded, it is recommended that you attempt to
solve them before attending the tutorial or reading the answer key.
|Exams:||There will be an 80-minute midterm exam Exams will be cumulative and test your understanding of the subject material and your ability to analyze and formulate solutions to specific problems. The assignments are intended to assist you in the preparation for the exams, but note that exam questions are typically different from assignment questions. The midterm exam is closed book. Electronic devices will not be permitted during closed-book exams, with the exception of approved non-programmable calculators without communication functions. There will be no deferred midterms.
|Missed Components:||If assignments or the midterm exam cannot be completed for a justifiable reason, it may be possible to make alternative arrangements prior to the due date at the instructor’s discretion. If no such arrangements are made and the component is missed, a grade of 0 will be assigned, unless the student provides written documentation of circumstances beyond his or her control that prevented him or her from completing the assignment on time. (This documentation typically takes the form of a doctor’s note.)
|Attendance:||University policies apply. Regular attendance is highly recommended.
Other InformationRecording of the Course
Students will be allowed to record lectures if they provide a reasonable rationale and if there are no objections by other students.
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Before you copy or distribute others’ copyright-protected materials, please ensure that your use of the materials is covered under the University’s Fair Dealing Copyright Guidelines available at https://library.usask.ca/copyright/general-information/fair-dealing-guidelines.php. For example, posting others’ copyright-protected materials on the open web is not covered under the University’s Fair Dealing Copyright Guidelines, and doing so requires permission from the copyright holder.
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