Published Dec 04, 2023
This course considers some of the main problems of macroeconomics and addresses their policy implications.
The Winter 2024 iteration of ECON 603/703 focuses on economic crises.
| Articulate a coherent view of the Global Financial Crisis |
| Assess the economic impacts of the Covid 19 epidemic |
Week | Date | Topic |
|---|---|---|
1 | Jan. 8 – Jan. 10 | introduction |
2 | Jan. 15 – Jan. 17 | unemployment fluctuations |
3 | Jan. 22 – Jan. 24 | self-fulfilling banking crises |
4 | Jan. 29 – Jan. 31 | banking crises and fundamentals |
5 | Feb. 5 – Feb. 7 | the 2007–2009 financial crisis |
6 | Feb. 12 – Feb. 14 | the role of debt in the financial system |
7 | Feb. 19 – Feb. 21 | READING WEEK |
8 | Feb. 26 – Feb. 28 | housing and mortgage markets |
9 | March 4 – March 6 | the Great Recession |
10 | March 11 – March 13 | economic impacts of Covid 19 |
11 | March 18 – March 20 | economic impacts of Covid-19 |
12 | March 25 – March 27 | economic impacts of Covid-19 |
13 | April 1 – April 3 | pandemic-era inflation |
14 | April 8 | conclusion |
Part 1. Introduction
Labor market fluctuations:
Shimer, Robert: “The cyclical behavior of equilibrium unemployment and vacancies,” American Economic Review, March 2005, 25-49.
Banking crises:
Diamond, Douglas and Philip Dybvig: “Bank runs, liquidity, and deposit insurance,” Journal of Political Economy, June 1983, 401-419.
Allen, Franklin and Douglas Gale: “Optimal financial crises,” Journal of Finance, August 1998, 1245-1284.
Part 2. The 2007–2009 financial crisis
Brunnermeier, Markus: “Deciphering the liquidity and credit crunch 2007-2008,” Journal of Economic Perspectives, Winter 2009, 77-100.
Holmström, Bengt: “Understanding the role of debt in the financial system,” January 2015, BIS working paper no. 479.
Manuel Adelino, Antoinette Schoar and Felipe Severino: ``The role of housing and mortgage markets in the financial crisis,'' Annual Review of Financial Economics, November 2018, 25-41.
Atif Mian and Amir Sufi: ``What Explains the 2007-2009 Drop in Employment?'' Econometrica, November 2014, 2197-2223.
Part 3. The COVID–19 crisis
Lei Li, Philip Strahan and Song Zhang: “Banks as lenders of first resort: evidence from the COVID‐19 crisis,” The Review of Corporate Finance Studies, November 2020, 472‐500.
Stephania Albanesi and Jiyeon Kim: ``Effects of the COVID-19 Recession on the US Labor Market: Occupation, Family, and Gender,'' Journal of Economic Perspectives, Summer 2021, 3-24.
Raj Chetty, John N. Friedman, Michael Stepner, and the Opportunity Insights Team: “The economic impacts of covid‐19: evidence from a new public database built using private sector data,” Quarterly Journal of Economics, forthcoming, July 2023.
Ben Bernanke and Olivier Blanchard: ``What caused the U.S. pandemic-era inflation,'' Hutchins Center Working Paper no. 86, Brookings Institution, June 2023.
| Component | Value |
|---|---|
| Attendance and course participation | 20% |
| Assignments | 55% |
| Presentations | 25% |
Attendance and course participation:
If you do not plan on attending this class on a regular basis, please drop the course.
I expect that you will attend class on a regular basis. I expect that you will have read the material and submitted the relevant assignment for each week. I will also expect that you will attempt to contribute to class discussions. In terms of participation marking, you should expect the following: if you attend class regularly, submit all assignments before the deadline, and participate in meaningful ways, you should expect a participation mark of 100%; if you attend class regularly, usually submit assignments in time, but do not contribute to class discussions regularly, expect a mark in the range 75-100%; if you do not attend class on a regular basis, or fail to submit several assignments, expect a mark in the range 0-75%.
Assignments:
A1. Discuss Shimer (2005, Section I. U.S. Labor Market Facts).
A2. Discuss Diamond and Dybvig (1983).
A3. Discuss Allen and Gale (1998).
A4. Discuss Brunnermeier (2009).
A5. Discuss Holmström (2015).
A6. Discuss Adelino et al. (2018).
A7. Discuss Mian and Sufi (2014).
A8. Discuss Li et al. (2020).
A9. Discuss Albanesi and Kim (2021).
A10. Discuss Chetty et al. (2020).
A11. Discuss Bernanke and Blanchard (2023).
Detailed information about each assignment is found in LEARN under “Assignments”.
All assignments must be submitted to a dropbox on LEARN by the specified deadline. Assignments submitted after the deadline will be marked down 20% per day late. Late assignments will be accepted for one week after the due date. After that the assignment will be marked as zero.
General instructions for assignments: All assignments are critical thinking exercises. As the course progresses, I will provide additional information about guidelines and expectations. The assignments will provide opportunities for you to examine the topics critically. As a general means of guidance, my markings can be described as follows:
70-100% indicates that an assignment presents obvious signs of critical thinking.
50-70% indicates that an assignment meets the minimum requirements. The main aspects of the assignment have been addressed, but it may be hindered by a lack of sound reasoning and clarity of exposition.
0-50% indicates that the assignment contains incorrect or misleading assertions, generally lacks sound reasoning, or it reflects superficial learning.
| Assignment | Due date | Weighting |
| A1 | Jan. 15 | 5% |
| A2 | Jan. 22 | 5% |
| A3 | Jan. 29 | 5% |
| A4 | Feb. 5 | 5% |
| A5 | Feb. 12 | 5% |
| A6 | Feb. 26 | 5% |
| A7 | March 4 | 5% |
| A8 | March 11 | 5% |
| A9 | March 18 | 5% |
| A10 | March 25 | 5% |
| A11 | April 1 | 5% |
| Total | 55% |
Presentations:
P1. Feb. 26: Adelino et al. (2018).
P2. March 4: Mian and Sufi (2014).
P3. March 11: Li et al. (2020).
P4. March 18: Albanesi and Kim (2021).
P5. March 25: Chetty et al. (2020).
P6. April 1: Bernanke and Blanchard (2023).
No assignment screening will be used in this course.
All deferred Final Exam requests for economics courses are administered by the Economics Undergraduate Office. Please consult the Deferred Exam Policy at
https://uwaterloo.ca/economics/undergraduate/resources-and-policies/deferred-final-exam-policy.
Academic integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. [Check the Office of Academic Integrity for more information.]
Grievance: A student who believes that a decision affecting some aspect of their university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70, Student Petitions and Grievances, Section 4. When in doubt, please be certain to contact the department’s administrative assistant who will provide further assistance.
Discipline: A student is expected to know what constitutes academic integrity to avoid committing an academic offence, and to take responsibility for their actions. [Check the Office of Academic Integrity for more information.] A student who is unsure whether an action constitutes an offence, or who needs help in learning how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group work/collaboration should seek guidance from the course instructor, academic advisor, or the undergraduate associate dean. For information on categories of offences and types of penalties, students should refer to Policy 71, Student Discipline. For typical penalties, check Guidelines for the Assessment of Penalties.
Appeals: A decision made or penalty imposed under Policy 70, Student Petitions and Grievances (other than a petition) or Policy 71, Student Discipline may be appealed if there is a ground. A student who believes they have a ground for an appeal should refer to Policy 72, Student Appeals.
Note for students with disabilities: AccessAbility Services, located in Needles Hall, Room 1401, collaborates with all academic departments to arrange appropriate accommodations for students with disabilities without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen the impact of your disability, please register with AccessAbility Services at the beginning of each academic term.
Turnitin.com: Text matching software (Turnitin®) may be used to screen assignments in this course. Turnitin® is used to verify that all materials and sources in assignments are documented. Students' submissions are stored on a U.S. server, therefore students must be given an alternative (e.g., scaffolded assignment or annotated bibliography), if they are concerned about their privacy and/or security. Students will be given due notice, in the first week of the term and/or at the time assignment details are provided, about arrangements and alternatives for the use of Turnitin in this course.
It is the responsibility of the student to notify the instructor if they, in the first week of term or at the time assignment details are provided, wish to submit alternate assignment.