Macroeconomics in the real world: A view from the IMF

Class 1: Thursday, June 6 A simple macroeconomic framework. In this class, we present a macro- economic framework, emphasizing links between growth, inflation, exchange rates and external imbalances. The ways in which such a framework is used by the IMF to think about macroeconomic policy will be discussed. Class 2: Tuesday, June 11 Fiscal Policy. In this class we use our framework to examine several key questions around fiscal policy. What is the role for fiscal policy in supporting long- term growth and in addressing economic cycles? What determines the effectiveness of fiscal policies? What is an appropriate level of public debt? How does fiscal policy interact with policies and outcomes in other areas? Class 3: Thursday, June 13 Monetary and exchange rate policy. This class will focus on the role of monetary and exchange rate policies in determining macroeconomic performance. What are the goals of monetary policy? How does a central bank conduct monetary policy? What are the key challenges? How are monetary and exchange rate policy related? What are some key lessons for central banks in the wake of the 2008-09 global financial crisis? Class 4: Tuesday, June 18 Economic crisis. This class will review the theory of, and experience with, current, capital account, and banking crises. We will also discuss policies to prevent or cope with such crises. What causes booms and busts? What real effects are associated with crises? What are some key lessons from the global financial crisis? Class 5: Thursday, June 20 The role of the IMF. The class will discuss the historical roots of the IMF and its role in crisis prevention and financial support of member countries. Specific examples, such as the Asian crisis and more recent IMF-supported programs in the EU will be highlighted, and potential lessons discussed. Class 6: Tuesday, June 25 Macroeconomic policy writing. The class will develop basic principles of good policy writing that can be applied to the assigned policy memo. A writing exercise will be worked on in class and discussed. Class 7: Thursday, June 27 IMF surveillance: Case study. In this class, we will review an example of IMF surveillance, based on a staff report for Turkey. This aims to illustrate how the IMF macroeconomic framework can be used to make sense of large amounts of data and undertake a coherent and consistent analysis of a country economy. This exercise will also serve as practice for student presentations next week. Class 8: Tuesday, July 2 IMF-supported programs: Case study. This class will make use of an IMF staff report for a Fund-supported program in Mongolia to illustrate key concepts behind program design and monitoring. Class 9: Thursday, July 4 Student presentations. Students will make presentations (20-30 minutes plus time for Q and A) on a macroeconomic isle of their choice. More detail will be provided on the first day of class. Class 10: Tuesday, July 9 Student presentations, continued. Class 11: Thursday, July 11 Student presentations (if necessary), policy memos and interview practice. Students should bring to class drafts of their policy memos for discussion and feedback. In addition, guidelines for a successful interview will be dis- cussed, and we will practice answering interview questions and provide feed- back. Class 12-13: Tuesday, July 16 Extended office hours/interviews. Students will have scheduled 15-20 minute interviews meant to simulate a panel interview at the IMF. They will be asked to discuss current economic issues, with emphasis on explaining their views within a coherent framework and emphasizing economic linkages. Final policy memos are due by the end of the day. Students may stop by during the day for further consultations on their memos.

The first eight classes will primarily be lectures, although ample opportunity will be provided for questions and discussion. Class 6, on policy writing, will include an in-class practice exercise, followed by feedback. Classes 9 and 10 (and 11 if necessary) will consist of presentations by each student focusing on a macroeconomic policy issue of their choosing. Class 11 will be open for students to consult with the professor on their policy notes and practice for the final interviews The last day (Classes 12 and 13) will be comprised of extended office hours and a series of one-on-one mock job interviews, about 15-20 minutes each. Policy memos will be due by the end of the day.

Course grades will be based equally on the three assignments: (i) the student presentation; (ii) the policy memo; and (iii) the mock interview.

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