ATENEO DE MANILA UNIVERSITY

LOYOLA SCHOOLS

COURSE SYLLABUS

COURSE NUMBER: Economics 112 – A and B

TITLE: Intermediate Macroeconomic Theory
PRE-REQUISITE: Economics 102
DEPARTMENT: Economics
SCHOOL: Social Sciences
SEMESTER and SCHOOL YEAR: First semester, SY 2019- 2020
NO. OF UNITS: 3
FACULTY: Joselito T. Sescon
SCHEDULE and VENUE: Tues and Thurs 12:30-2:00 p.m. and 2:00- 3:30 p.m. CTC 408/305

I. Course Description:

This course introduces the theory of national income determination and economic growth utilizing
alternative models of the economy and the interaction and relation of aspects of these models to
empirical aggregate analysis. The course will deal with the aggregate behavior of households, firms,
the government and other economic agents. This course will provide an overview of macroeconomic
issues, including the determination of output, consumption, investment, employment, interest rates,
inflation, and growth and productivity, in different countries and in the Philippines. Monetary and
fiscal issues will be discussed, as well those related to the open economy. An introduction to the
basic models of macroeconomics, such as the short-run IS-LM model, the medium-run AS-AD model
and long-run growth models, will be made. During this term, the course will be taught in the light on
the different streams of thought, including classical, Keynesian, monetarist and rational expectations
thought. While most of the course texts deal with developed country issues, an introduction to the
macroeconomic problems of developing countries not treated in the main texts, time permitting,
will be discussed briefly at the end of the course. The course will be primarily taught through
lectures following the textbook. However, individual quizzes and group problem solving case studies
will also be undertaken as a requirement. Video presentations may also be provided.

II. Course Expected Outcomes

Upon completion of the course, students must be able to:

1. In terms of content
a. Differentiate, compare and criticize the different schools of macroeconomic thought.
Students will be able to distinguish the merits of classical, Keynesian, neoclassical and New
Keynesian schools.
b. Derive macroeconomic functions and models related to growth accounting, consumption
analysis, the Keynesian macroeconomic model and the Phillips curve.
2. In terms of skills
a. students are able to communicate their views/ arguments regarding macroeconomic issues
utilizing graphical and mathematic analyses.
b. derive (policy/ practical) implications using macroeconomic data.
3. In terms of attitude
a. engage in macroeconomic policy debates;
b. explain the type of policy (i.e., fiscal, monetary) that would best suit a specific
macroeconomic environment.

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III. Course Outline

First week: Introduction to the Science and Data of Macroeconomics

Second – fourth week: The economy in the long run

 The national income
 Money and inflation
 The open economy
 Unemployment
First Long Test

Fifth – tenth week: The economy in the short run

 Introduction to economic fluctuations
 Building the IS-LM model
 Applying the IS-LM model
 The Mundell-Fleming and exchange rate regime
 Aggregate supply, inflation and unemployment
 Application of AS-AD model with IS-LM
Second Long Test

Eleven – thirteenth week: The economy in the very long run

 Growth theory and capital accumulation
 Technology, empirics, and policy

Fourteen – Sixteenth week: Macroeconomics debates and issues

 Stabilization Policy
 Government debts and budget deficits
 Crises economics (The Bernanke Lectures)
Final Exam

IV. Required Readings

The course textbook:

Mankiw, N. Gregory (2010). Macroeconomics (7th edition). New York: Worth Publishers.

The following will also be utilized as supplementary text:

Dornbusch, Rudiger, Stanley Fischer and Richard Startz (2003). Macroeconomics (9th Edition). New
York: McGraw-Hill.

V. Suggested Readings and other Class Resources

Students may wish to consult at the following for more data or studies on the macroeconomy: for
local economic studies/ surveys, Philippine Institute for Development Studies www.pids.gov.ph or
the University of the Philippines’ School of Economics www.econ.upd.edu.ph, for macroeconomic
data, National Economic and Development Authority www.neda.gov.ph, National Statistical Office
www.census.gov.ph, the National Statistical Coordinating Board www.nscb.gov.ph, the Bangko
Sentral ng Pilipinas www.bsp.gov.ph/statistics/overview.asp and the Bureau of Labor and
Employment Statistics www.bles.dole.gov.ph.

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For international macroeconomic issues and data, see papers that are available at the World Bank
http://econ.worldbank.org, and the International Monetary Fund www.imf.org. For more critical
perspectives on the global macroeconomy, see the Center for Economic Policy Research
www.cepr.org, World International Development Economic Research Center of the United Nations
University www.wider.unu.org, and the International Development Economics Association
www.networkideas.org.

Websites of macroeconomists would also be useful in getting some idea of what the subject is. Some
of the more known ones are that of N. Gregory Mankiw www.gregmankiw.blogspot.com, Dani
Rodrik http://rodrik.typepad.com/ , J. Bradford de Long http://www.j-bradford-delong.net/ and
Nouriel Roubini http://pages.stern.nyu.edu/~nroubini/ who also runs an economics articles tracking
service. Other economist blog sites are also useful; see, for example, the New Economist blog site
http://neweconomist.blogs.com/, for an example and a list of blog sites.

It would be good to read the business pages for macroeconomic data once in a while; the
Businessworld or Business Mirror dailies have very extensive reviews on economic issues in the
country.

VI. Course Requirements:

The course requirements will consist of the following:

 Three long exams (80 percent). The two long exams (25 percent each) will be one and a
half hour closed-book exams that will be given at the middle of the course, and a final
examination (30 percent) that will be a comprehensive essay exam that will assess
student understanding of concepts and applications discussed in class;
 Quizzes, individual essay assignments, and group problem solving homework (20
percent)

Assessment Method ELO 1a ELO 1b ELO 2a ELO 2b ELO 3a ELO 3b

First two long exams X X X X
Final exam X X X
Individual essays (homework) X X X
Problem solving (homework) X X
Quizzes X X X X

VII. Grading System

The letter grade equivalents will be as follows: 92- 100, A; 87- 91, B+; 82- 86, B; 77- 81, C+; 70- 76, C;
60- 69, D; 59 and below, F. No exemptions from the final exam will be given during this term.

VIII. Classroom Policies

1. Class attendance will be expected of all students. You are entitled to six (6) absences for the entire
semester. Attendance will be checked 15 minutes after the second bell.
2. Deadlines: Hard copies of all papers (homeworks, assignments, etc.) must be submitted during
class time, unless otherwise specified. Papers submitted after class time will be considered late.
Late papers will merit the following deductions:
After class time, but before 5 p.m. of the next day = 10% deduction
1 – 3 days late = 30% deduction
Beyond 3 days = will not be Accepted; a grade of “0” will be given

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3. Proper annotations should be practiced at all times. Online sources must be cited properly as
well. Please do not cite me or any of my lectures. Students should cite the original reading
materials required.
4. Students should make sure that submitted papers are properly printed, free from grammatical,
typographical and factual errors.
5. Laptops are allowed in taking notes during class.

IX. Consultation Hours

Consultation hours for this course will be Tuesdays and Thursdays, 3:30 to 5:00 pm, or by
appointment, at the Economics Department. In cases of absences by the lecturer, a make-up class
will be scheduled during the time period agreed beforehand in class.

A course e-mail group will be utilized for posting of announcements, uploading of lecture notes,
exercises (and their answers) and other course readings. All students should sign up for the e-
mail/facebook group at the beginning of the course.

Email address: jsescon@ateneo.edu