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Unit of study_

ECOS3028: Macroeconomics of Fiscal Policy

Semester 1, 2021 [Normal day] - Remote

The objective of the course is to examine the role of the government in influencing individual behavior and the macro economy through fiscal policy, that is, government spending, taxation, and social insurance programs (such as social security and unemployment insurance). In this course we will develop and use a dynamic theoretical model of individual decisions and study how government tax and transfer policies, government debt and deficits affect these decisions. The theoretical predictions of these models will then be related to data and empirical findings.

Unit details and rules

Unit code ECOS3028
Academic unit Economics
Credit points 6
Prohibitions
? 
None
Prerequisites
? 
ECOS2002
Corequisites
? 
None
Assumed knowledge
? 

None

Available to study abroad and exchange students

Yes

Teaching staff

Coordinator Aarti Singh, aarti.singh@sydney.edu.au
Type Description Weight Due Length
Final exam (Open book) Type C final exam Final Exam
Open book exam, 2 hours+upload time
40% Formal exam period 2 hours
Outcomes assessed: LO1 LO2 LO3
In-semester test (Open book) Type C in-semester exam Mid-semester exam
Mid-semester test is a open book in-semester test. Duration: 2 hours+upload
35% Week 07
Due date: 19 Apr 2021 at 11:00
2 hours
Outcomes assessed: LO1 LO2
Presentation group assignment Research essay
Essay and presentation of results
25% Week 13 1500-2000 words + 30 minute presentation
Outcomes assessed: LO1 LO2 LO3
group assignment = group assignment ?
Type C final exam = Type C final exam ?
Type C in-semester exam = Type C in-semester exam ?

Assessment summary

Mid-semester test is an open book in-semester test. Duration: 2 hours+upload time. The exam is on April 19th (Monday) 2021, 11-1 pm (plus upload time). It will have analytical problems (either mathematical, descriptive or both) based on topics studied during the first half of the semester (Week 1-Week 5, including tutorials and practice problems).

 

Final exam is a open-book exam, 2 hours plus upload time. It will have analytical problems (either mathematical, descriptive or both) based primarily on topics studied during the second half of the semester (partially cumulative).

Research essay and presentation: This assessment will involve group assignment; research on a topic given by the lecturer and the presentation of research results in Week 12 and Week 13. The due date for the essay is Week 13.

For each assessment, more details will be provided via Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a high distinction indicates work of an exceptional standard, a distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name

Mark range

Description

High distinction

85 - 100

 

Distinction

75 - 84

 

Credit

65 - 74

 

Pass

50 - 64

 

Fail

0 - 49

When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see sydney.edu.au/students/guide-to-grades.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

  • Deduction of 5% of the maximum mark for each calendar day after the due date.
  • After ten calendar days late, a mark of zero will be awarded.

This unit has an exception to the standard University policy or supplementary information has been provided by the unit coordinator. This information is displayed below:

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date: 1. Deduction of 5% of the maximum mark for each calendar day after the due date. 2. After ten calendar days late, a mark of zero will be awarded.

Academic integrity

The Current Student website  provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.  

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

You may only use artificial intelligence and writing assistance tools in assessment tasks if you are permitted to by your unit coordinator, and if you do use them, you must also acknowledge this in your work, either in a footnote or an acknowledgement section.

Studiosity is permitted for postgraduate units unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission.

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

WK Topic Learning activity Learning outcomes
Week 01 Empirical facts of government economic activity. Recap of Static Consumption-Saving Model Lecture and tutorial (3 hr) LO1
Week 02 Models of Consumption and Saving (two period partial equilibrium model) Lecture and tutorial (3 hr) LO1 LO2
Week 03 Models of Consumption and Saving (two period general equilibrium model) Lecture and tutorial (3 hr) LO1 LO2
Week 04 Models of Consumption and Saving (life-cycle model; precautionary savings) Lecture and tutorial (3 hr) LO1 LO2
Week 05 Theory of Taxation (government activity and government budget constraint) Lecture and tutorial (3 hr) LO1 LO2
Week 06 Theory of Taxation (Ricardian Equivalence; brief history of taxes) Lecture and tutorial (3 hr) LO1 LO2
Week 07 Mid-semester test Lecture and tutorial (3 hr) LO1 LO2
Week 08 Theory of Taxation (Key concepts of taxes; a model with taxes); Mid-semester test review Lecture and tutorial (3 hr) LO1 LO2
Week 09 Theory of Taxation (a model with taxes) Lecture and tutorial (3 hr) LO1 LO2 LO3
Week 10 Social Security, retirement programs and social insurance (unemployment) Lecture and tutorial (3 hr) LO1 LO2 LO3
Week 11 Generational accounts and overview Lecture and tutorial (3 hr) LO1 LO2 LO3
Week 12 Research essay Lecture and tutorial (3 hr) LO1 LO2 LO3
Week 13 Research essay Lecture and tutorial (3 hr) LO1 LO2 LO3

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

There is no prescribed textbook for this class. However, the following books are recommended

Sanjay Chugh: Modern Macroeconomics, MIT Press, 2015 (SG)

William A. Lord: Household Dynamics, Economic Growth and Policy, Oxford University Press, Oxford, 2002 (WL)

Michael Wickens: Macroeconomic Theory, Princeton University Press, 2008 (MW)

 

Other useful references

John Taylor and Harold Uhlig: Handbook of Macroeconomics, Elsevier, 2016

Lars Ljungqvist and Thomas Sargent: Recursive Macroeconomic Theory, MIT press, 2012

I will use material from these textbooks, journal articles, and detailed lecture notes by Prof. Dirk Krueger (University of Pennsylvania), available on the Canvas course web site.

I believe that an important aspect of this unit is being able to apply the concepts covered in class to the real world. Therefore, being informed of current fiscal issues will be useful. So I would recommend that students read newspapers and articles in Economist, Science and other sources at least for the duration of this course.

 

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

At the completion of this unit, you should be able to:

  • LO1. Understand the role of government in developed countries
  • LO2. Examine critically how fiscal policy (government spending, taxation and social insurance) impacts behavior and the macroeconomy
  • LO3. Understand optimal fiscal policy and evaluate whether current policy is close to optimal.

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1 Depth of disciplinary expertise

Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.

GQ2 Critical thinking and problem solving

Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.

GQ3 Oral and written communication

Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.

GQ4 Information and digital literacy

Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.

GQ5 Inventiveness

Generating novel ideas and solutions.

GQ6 Cultural competence

Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.

GQ7 Interdisciplinary effectiveness

Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.

GQ8 Integrated professional, ethical, and personal identity

An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.

GQ9 Influence

Engaging others in a process, idea or vision.

Outcome map

Learning outcomes Graduate qualities
GQ1 GQ2 GQ3 GQ4 GQ5 GQ6 GQ7 GQ8 GQ9

This section outlines changes made to this unit following staff and student reviews.

Based on student feedback, this year I have/will made two changes (1) increased the weight on the presentation+research essay from 20 percent to 25 percent (2) provide more detailed answers to some of the tutorials.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.