University of Ottawa

Department of Economics

ECO2142 Macroeconomic Theory I

Fall 2011

Description:

This course presents basic modern macroeconomic theory. The student will learn some models, techniques and analytical tools that will help him understand the contemporary macroeconomic context and help him to pursue advanced studies in macroeconomics. The topics that will be covered in this course include the IS-LM model, the labour market, the aggregate demand and supply, the Phillips curve, inflation and an introduction to international macroeconomic analysis.

Textbooks:

Blanchard, O. and D. Johnson (2010), Macroeconomics – 4th Canadian Edition, Pearson Canada, Toronto. This book is available at the university’s bookstore.

OECD Country Notes on Canada

Professor Joseph Stiglitz: The global economic situation and sovereign debt crisis

Slides:

Old exams :

Midterm I (winter 2010)  

Midterm I (winter 2011)             

Midterm II (winter 2010)         

Midterm II (winter 2011)      

Evaluation:

Midterm exam (October 19, 2011)      40%

Final exam                                              60%

The only acceptable excuses for missing an exam are illness/injury, severe illness/injury/death in the family or jury duty. Third-party evidence will be required. For example, medical certificates will have to be validated by the University of Ottawa Health Service on the 3rd Floor of 100 Marie-Curie. Please consult the note from the University of Ottawa Health Service.

Academic Fraud

Academic fraud is neither accepted nor tolerated by the University. Anyone found guilty of academic fraud is liable to severe academic sanctions. Students can refer to http://www.uottawa.ca/plagiarism.pdf for more information.

Outline

1.1  The demand for goods

1.2  The determination of equilibrium output

1.3  A first look at fiscal policy

1.4  The financial markets

1.5  The IS-LM model

1.6  Macroeconomic policies

1.7  The liquidity trap

Reference :          Chapter 3, 4 and 5

2.1 Microeconomic foundation of unemployment

2.2 Wage determination

2.3 Equilibrium employment in presence of nominal rigidities

Reference :          Chapter 9

3.1 The aggregate supply

3.2 The aggregate demand

3.3 Equilibrium output in the short run and the medium run

3.4 The impact of a macroeconomic policies

3.5 Supply shocks

Reference :          Chapter 10

4.1 Inflation and Unemployment

4.2 The Phillips Curve

4.3 The impact of wage indexation

Reference :          Chapter 11

5.1 Output, unemployment and inflation

5.2 The medium run

5.3 Disinflation I : the traditional analytical framework

5.4 Disinflation II : Expectations, credibility and nominal rigidities

Reference :          Chapter 12

6.1 The IS relation in an open economy

6.2 Equilibrium output and trade balance

6.3 Depreciation, the trade balance and output

6.4 Saving, investment and trade balance

Reference :          Chapter 7

7.1 Domestic and foreign bonds

7.2 IS-LM in an open economy

7.3 Macroeconomic policy in presence of a flexible exchange rate

7.4 Macroeconomic policy in presence of a fixed exchange rate

7.5 Choice of an exchange rate regime

Reference :          Chapter 8