|Year of offer||2017|
|Fees||Subject EFTSL, Level, Discipline & Census Date|
This subject examines the use of open economy macroeconomic models in economic policy analysis. Topics include important Australian macroeconomic data sets; the design of macroeconometric and VAR models of the Australian economy; the derivation of policy multipliers; policy simulation techniques and sensitivity analysis of economy-wide models; recent developments in the theory of economic growth; and an examination of some current issues in macroeconomic policy.
Intended learning outcomes
On successful completion of this subject students should be able to:
- Explain the limitations of static comparative-equilibrium analysis (including IS-LM) for policy formation and evaluation;
- Evaluate the role of Walras' Law in macroeconomic modelling;
- Apply models to capture dynamic elements in markets and ensure a consistent relationship between stocks and flows;
- Identify recursive elements of models involving a number of structural equations;
- Apply numerical algorithms to solve non-linear and simultaneous models;
- Describe the differences between short and long run policy multipliers;
- Express a system of linear equations in matrix form and solve the system for relevant multipliers;
- Describe and evaluate alternative models of the equilibrium rate of unemployment;
- Describe and evaluate alternative models of the demand for stocks of financial assets, including money;
- Explain models of household consumption behaviour;
- Explain and evaluate competing models of production and economic growth;
- Identify the various rules used to solve both static and dynamic economic models;
- Analyse the documentation that accompanies models of the Australian economy;
- Perform policy simulations and analyse the results.
High level of development: statistical reasoning; application of theory to practice; interpretation and analysis; critical thinking; synthesis of data and other information; receptiveness to alternative ideas.
Moderate level of development: oral communication; written communication; collaborative learning; problem solving; evaluation of data and other information; use of computer software.
Some level of development: team work; accessing data and other information from a range of sources.