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Welcome to Econ
302!

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Contact Information
Instructor: Alfred Kong
Office: Iona 011
Office Hours: Tuesday 2:00 to 3:00pm
Email: alfred.kong@ubc.ca

TA: Emma Wei


Office: Iona 435
Office Hours: Tuesday 2:00 to 4:00pm
Email: mengyingwei07@gmail.com

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Course Website
Connect
http://elearning.ubc.ca/connect/
What you can get from the website:
-Lecture slides (before each class)
-Practice questions
-Sample exams

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Required Textbook
Mishkin, Macroeconomics Policy and Practice, 2nd Edition,
2015, Pearson.

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Course Evaluation
Midterm
Date:

40% (Ch.1,2,3,6,7)
July 26, 11:00 to 1:00pm

Final
Date:

60% (Cumulative)
TBA

* Final is worth 100% if your final score is higher than the


midterm score

Class

Topics

Reading

Introduction
Measuring the Macroeconomy

Ch.1
Ch.2

Measuring the Macroeconomy


Aggregate Production and Productivity

Ch.2
Ch.3

Solow Growth Model

Ch.6

Solow Growth Model


Romer Growth Model

Ch.6
Ch.7

Romer Growth Model

Ch.7

Business Cycles
The IS Curve

Ch.8
Ch.9

Midterm (July 26 11:00-1:00pm)

Monetary Policy and AD

Ch.10

AS and the Philips Curve

Ch.11

10

The AD and AS Model

Ch.12

11

Stabilization Policy

Ch.13

12

Financial Crisis and the Economy*


* If time permits

Ch.15

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Course Objectives
The course debates some of the
macroeconomic theory, such as
1)Measurement of the economy
2)Long-term economic growth
3)Business cycles
4)Unemployment and inflation
5)Growth policy and stabilization policy
6)Financial Crises*

most

important

topics

in

Some interesting questions that we will discuss:


1) How to forecast short-run fluctuations?
2) What kind of policies promote economic growth?
3) What causes business cycles?
4) What is the role for economic policy and the government?
5) Why the last financial crisis did not lead to an economic depression*?
* When time permits

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Knowledge from Econ 102


We will do a quick review of the followings. All the following concepts are
learnt in Econ 102:
1)GDP
Nominal
Real
Per capita
Omissions from GDP
2)Unemployment
Employment, unemployment, labour force
Unemployment rate
3)Price level
CPI
GDP deflator
Inflation

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Knowledge from Econ 102


We will do a quick review of the followings. All the following concepts are
learnt in Econ 102:
4)Interest rate
Nominal
Real

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Canada Macroeconomic Data


Lets take a look at some figures about Canadas:
1) Production
2) Recession
3) Employment
4) Price Level
5) Interest rates
6) Foreign exchange and trade
7) Budget deficits

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Real GDP

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Past Recessions
Recession Begins

Ends

Duration

September 1947

March 1948

6 months

February 1949

July 1949

5 months

June 1951

December 1951

6 months

April 1953

April 1954

12 months

April 1957

January 1958

11 months

February 1960

March 1961

13 months

March 1970

June 1970

3 months

January 1975

March 1975

2 months

February 1980

June 1980

4 months

July 1981

October 1982

15 months

April 1990

April 1992

24 months

October 2008

July 2009

9 months

January 2015

June 2015

6 months

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2008-2009 Recession

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Last 3 Recessions

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Last 3 Recessions

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Unemployment

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Inflation Rate

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Interest Rates

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Canada-US Exchange Rate

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Source: http://www.international.gc.ca/economist-economiste/performance/state-point/state_2015_point/index.aspx?lang=eng#1.0

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Canadian Federal Government Deficits

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Canadian Federal Government Deficits

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Canadian Federal Government Deficits

Source: http://www.budget.gc.ca/2016/docs/plan/overview-apercu-en.html

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What are We Going to Learn?


1) Measurement of the economy
GDP omits home production, underground economy,
etc. Why do we still trust this number?
What do we use to forecast the movement of GDP?
Why CPI is not a perfect measurement of price level?
How can we make it better?
Why the unemployment rate does not give a full picture
of unemployment?

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What are We Going to Learn?


2) Long-term economic growth
Does a wealthy country always remain wealthy over
time?
Why advanced economies like US or Canada grow at a
much slower pace than emerging economies like China
or India?
What policy would promote growth?

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What are We Going to Learn?


3) IS and MP curves, the Philips curve, AD-AS model
What is the impact on our GDP in the short run and long
run if the following happens?
a) an increase in oil price
b) aging population
c) a decline in house price
d) a recession in Europe or US
e) an increase in money supply
What is the relationship between unemployment and
inflation?

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What are We Going to Learn?


4) Stabilization policies
Is monetary policy or fiscal policy more effective as a
stabilization policy?

How do lags affect the way stabilization policy should be


made?
The Taylor Rule
What could be the long run consequences of the socalled QE I, II and III in US?

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What are We Going to Learn?


5) Financial Crisis*
Dynamics of financial crises
Why the 2007-2009 financial crisis did not lead to a
depression in US?
* If time permits