University of Sydney · S2 2026 · FACULTY OF ECONOMICS

ECON6002 Macroeconomic Analysis

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ECON6002 Overview

Macroeconomic Analysis

— Master modern macro theory from first principles — one-period optimization to the full New Keynesian DSGE model, derived not memorised.

University of Sydney
S2 2026
10 chapters
Economics

ECON6002 Macroeconomic Analysis is the University of Sydney's postgraduate macro-theory unit, building modern macroeconomics from micro-foundations — optimising households and firms — all the way to the full log-linearised New Keynesian DSGE model with financial frictions.

Assessed by Problem Set 1 (Online Quiz) 7.5% · In-Semester Test (Midterm) 30% · Problem Set 2 (Online Quiz) 7.5% · Final Exam 55%
Key terms Micro-foundations, Euler equation, IES (intertemporal elasticity of substitution), Solow-Swan model
How to prepare Treat ECON6002 Macroeconomic Analysis at the University of Sydney as a single method drilled ten times rather than ten separate topics: master…
Most asked Where can I find ECON6002 past exam papers or practice questions?

ECON6002 · University of Sydney

An independent, AskSia-authored study guide. AskSia is not affiliated with, endorsed by, or sponsored by University of Sydney; the course code and name are used for identification only.

Assessment

How ECON6002 is assessed

Component	Weight	Format
Problem Set 1 (Online Quiz)	7.5%	Canvas online quiz, ~30 minutes
In-Semester Test (Midterm)	30%	Supervised in-person, closed-book, 1 hour, 4 extended-response questions (100 marks), Topics 1-6
Problem Set 2 (Online Quiz)	7.5%	Canvas online quiz, ~30 minutes
Final Exam	55%	Supervised in-person, closed-book, 2 hours + 10 min reading, 3 questions (T/F/U + extended-response), 100 points, Topics 7-10

Contents · every chapter, one map

What ECON6002 covers

The unit unfolds as one continuous build — static one-period optimisation, then time, then uncertainty, then nominal rigidity, then finance — so each of the ten topics below reuses the Euler-equation-and-log-linearisation machinery of the ones before it.

One-Period Macroeconomic Models

Static general equilibrium · household & firm optimization · labour market clearing

The first topic of ECON6002 Macroeconomic Analysis at the University of Sydney builds modern macro from its micro-foundations: a representative household maximises utility subject to a budget constraint, a competitive firm maximises profit subject to a production function, and the two plans meet in a single labour market cleared by the real wage W/P.

Micro-foundations — every aggregate outcome is the solution to an optimisation problem (rational, optimising agents)
Two solution techniques — substitution (fold the constraint into the objective) vs Lagrange (add it with a multiplier λ); both give the same FOC
Two-good consumer optimum — the indifference curve is tangent to the budget line, so MRS = the price ratio p₁/p₂ (utility is ordinal only)
Household consumption–leisure choice — max U(C, L) s.t. PC = W(1−L) + π, giving the FOC MRS between leisure and consumption = W/P
Labour supply and the wealth effect — non-labour income π (or a stronger taste for leisure) shifts labour supply left; with log utility and π = 0 it is vertical
Firm production and labour demand — max PY − WN with Y = A·Kᵃ·N¹⁻ᵃ (capital fixed), giving MPL = (1−α)A·Kᵃ·N⁻ᵃ = W/P

The Two-Period Model

Intertemporal choice · Euler equation · intertemporal elasticity of substitution

The Two-Period Model is Topic 2 of ECON6002 Macroeconomic Analysis at the University of Sydney, and the chapter where time first enters the course.

The two-period problem — maximise u(C₁) + β·u(C₂) subject to C₁ + S = Y₁ and C₂ = Y₂ + (1+r)S, with discount factor β ∈ (0,1)
The intertemporal budget constraint (IBC) — eliminate saving S to get C₁ + C₂/(1+r) = Y₁ + Y₂/(1+r) ≡ W, lifetime wealth in period-1 dollars
Relative price of future consumption — normalise the price of C₁ to 1, so C₂ costs 1/(1+r) today; a higher r makes the future cheaper
The consumption Euler equation — u′(C₁) = β(1+r)·u′(C₂): marginal utility today equals discounted, return-weighted marginal utility tomorrow
Log and CRRA utility — u′ = 1/C gives the linear tilt C₂ = β(1+r)C₁; CRRA u′ = C^(−σ) gives the growth rule C₂/C₁ = [β(1+r)]^(1/σ)
The intertemporal elasticity of substitution — IES = d ln(C₂/C₁)/d ln(1+r) = 1/σ, measuring how strongly the household re-times consumption when r moves

The Solow-Swan Growth Model

Steady state · balanced growth path · golden rule · convergence

ECON6002 Macroeconomic Analysis at the University of Sydney introduces the Solow-Swan model as the first serious theory of long-run growth, built by Robert Solow at MIT and Trevor Swan at ANU.

Set-up — labour-augmenting technology, effective labour AL, and the intensive form y = f(k)
The fundamental Solow equation — k̇ = s·f(k) − (n+g+δ)k, derived via the quotient rule
Break-even investment — depreciation δk plus capital dilution (n+g)k just to hold k constant
The steady state k* — where actual investment equals break-even; k* = [s/(n+g+δ)]^(1/(1−α)) for Cobb-Douglas
The balanced growth path — k, y, c per effective worker constant; aggregates grow at n+g, per-capita output at g
Stability and convergence — k̇ > 0 below k* and k̇ < 0 above, so poorer economies grow faster and catch up

Growth Accounting & the Cass-Ramsey Model

TFP decomposition · optimal savings · Lagrangian household problem

Growth accounting and the Cass-Ramsey model form Topic 4 of ECON6002 Macroeconomic Analysis at the University of Sydney, welding two ideas together.

Growth vs development accounting — decomposing a growth RATE over time versus an income LEVEL across countries
The Hall-Jones decomposition — ln(Y/L) = [α/(1−α)]ln(K/Y) + ln(H/L) + ln A
TFP / the Solow residual — why A is a residual, not an input, and dominates income gaps
The amplifier α/(1−α) — how the capital share turns a saving gap into a modest or an enormous income gap
Cass-Ramsey setup — endogenising saving with an infinite-horizon optimising household and CRRA utility
The consumption Euler equation — MU today = discounted, return-weighted MU tomorrow, with θ = inverse IES

Real Business Cycle Model, Part 1

DSGE foundations · rational expectations · equilibrium conditions

ECON6002 Macroeconomic Analysis at the University of Sydney reaches its first fully Dynamic Stochastic General Equilibrium (DSGE) model here: the Real Business Cycle (RBC) model, which takes the Cass–Ramsey growth model and adds stochastic technology shocks and endogenous labour.

Business cycles & stylised facts — comovement, relative volatility (I ≫ Y > C smoother), persistence
The RBC/DSGE framework — Cass–Ramsey + stochastic shocks + endogenous labour, rational expectations
Classical dichotomy — real outcomes independent of nominal variables; no monetary-policy role
Firm side — Cobb–Douglas production Yₜ = Kₜ^α(AₜLₜ)^(1−α); factor demands wₜ, rₜ
Shocks — technology & government spending as AR(1) processes; no shocks ⇒ no cycles
Household FOCs — intratemporal labour condition and the stochastic consumption Euler equation

Real Business Cycle Model, Part 2

Log-linearization · numerical solution · Dynare · impulse responses

ECON6002 Macroeconomic Analysis at the University of Sydney reaches its methodological core in Real Business Cycle Model, Part 2: how you actually solve a DSGE model once it is written down.

What a DSGE “solution” is — policy functions of the state variables (capital and the shock); why 0 < δ < 1 admits no closed form
The steady state — the no-shock resting point the whole approximation is taken around
Log-linearisation — a first-order Taylor approximation written in log-deviations (“hats”) from steady state
Rule 1 — products and ratios become sums and differences of hats (the production function)
Rule 2 — an additive rate divides by the steady-state sum (the r + δ trap)
The linear system A·ᴇₜXₜ₊₁ = BXₜ + Dεₜ and the Blanchard–Kahn determinacy conditions

Nominal Rigidities & the New Keynesian Model

Monopolistic competition · Calvo pricing · dynamic IS curve

In ECON6002 Macroeconomic Analysis at the University of Sydney, Topic 7 is the hinge of the whole unit: it breaks the money-neutrality of the Real Business Cycle model by adding two frictions — monopolistic competition (a real markup) and Calvo price stickiness (a nominal rigidity).

Why RBC is not enough — money non-neutrality, demand shocks, and sticky-price evidence (Bils–Klenow, ~7–12 month price durations)
The three building blocks — household ⊕ monopolistic firms ⊕ central bank, keeping RBC's rational expectations
The household block — objective, labour-supply FOC, and the NK Euler equation with nominal variables
Monopolistic competition and CES (Dixit–Stiglitz) demand — the downward-sloping demand curve each firm faces
The constant markup μ = ε/(ε−1) over marginal cost, and its competitive limit as ε → ∞
Natural (flexible-price) output — the policy-independent benchmark the output gap is measured against

The New Keynesian Phillips Curve

Calvo price-setting · inflation dynamics · marginal cost

The New Keynesian Phillips Curve (NKPC) is Topic 8 of ECON6002 Macroeconomic Analysis at the University of Sydney, and the most heavily examined result in the unit.

Why we need nominal rigidity — RBC money neutrality fails three data facts (money non-neutrality, inflation–output co-movement, sticky prices lasting ~7–12 months)
The three NK building blocks — optimising households (dynamic IS), monopolistically competitive firms under Calvo stickiness (the NKPC), and a Taylor-rule central bank
Calvo pricing — each period a firm resets its price with constant probability (1−θ); average price duration is 1/(1−θ), so θ = 0.75 means prices last 4 quarters
The optimal reset price — a mark-up over a βθ-weighted average of current and expected future nominal marginal cost, because a reset price may stick for many periods
The NKPC, marginal-cost form — π̂ₜ = β·Eₜπ̂ₜ₊₁ + λ·m̂cₜ with slope λ = (1−θ)(1−βθ)/θ; β multiplies EXPECTED, not lagged, inflation
The NKPC, output-gap form — π̂ₜ = β·Eₜπ̂ₜ₊₁ + κ·ỹₜ with κ = λ(σ+φ), using the mapping m̂cₜ = (σ+φ)ỹₜ from the labour-supply condition

Monetary Policy in the NK Model

Taylor rule · determinacy · optimal policy · welfare

Monetary Policy in the NK Model is Topic 9 of ECON6002 Macroeconomic Analysis at the University of Sydney, and one of the two extended-response topics the 55% final is built on.

The three-equation NK model — dynamic IS (demand) + NKPC (supply) + Taylor rule (policy), solved for the output gap ỹ, inflation π̂ and the nominal rate r̂
The transmission channel — with sticky prices, moving the nominal rate moves the real rate rr = r̂ − Eπ̂′, which shifts aggregate demand; under flexible prices this vanishes (neutrality)
The Taylor principle — φ_π > 1 is needed for a unique, stable (determinate) equilibrium, because the nominal rate must out-run inflation so the real rate rises
Indeterminacy — if φ_π < 1 the real rate falls when inflation rises, validating self-fulfilling 'sunspot' beliefs and giving a continuum of equilibria
The i.i.d. closed form — with i.i.d. shocks (φ_r = φ_y = 0) every expectation is zero, the model turns static and ỹ, π̂, r̂ solve algebraically
The shock taxonomy — demand and technology shocks move the gap and inflation together (no trade-off); a cost-push shock moves them in opposite directions (a trade-off)

Financial Frictions & Macroprudential Policy

Financial accelerator · credit constraints · macroprudential regulation

Financial frictions and macroprudential policy form Topic 10 of ECON6002 Macroeconomic Analysis at the University of Sydney — the capstone of the New Keynesian block.

Why standard NK is not enough — representative agent, Modigliani–Miller, no credit spread, no intermediaries, no systemic risk
The Suh (2014) extension — patient savers (β) vs impatient borrowers (β_b < β) plus a banking sector
Two-type Euler equations — savers face R^s, borrowers face R^b > R^s, so aggregate demand becomes financially sensitive
The credit spread — R̂ᵇ = R̂ˢ + ζℓ̂: level term (1+ω+φ_L) sets the steady-state spread, elastic term ζℓ̂ makes it cyclical
The financial accelerator — credit up → spread up → borrower rate up → demand down → feeds back onto credit
Macroprudential policy (φ_L) — countercyclical LTV/DTI caps, capital buffers and reserve requirements that lean against credit booms

Across ten topics you derive, rather than memorise, the consumption Euler equation, the Solow-Swan growth model, Real Business Cycle DSGE dynamics, the New Keynesian Phillips Curve, and monetary and macroprudential policy.

The assessment rewards derivation and mechanism, not recall: both the 30% closed-book in-semester test (Topics 1-6) and the 55% closed-book final exam (Topics 7-10) are extended-response papers where the marks live in the working, the labelled diagrams, and the stated assumptions.

The final in particular is built almost verbatim on Tutorials 7-10, so the payoff is fluency with constrained optimisation, Euler equations, Lagrangians and log-linearisation. Score high by showing every step and naming which parameter a shock moves before you touch the algebra.

Worked example · free

Two-Period Model — Euler Equation, Consumption and Saving

Q [16 marks]. In ECON6002 Macroeconomic Analysis at the University of Sydney, the consumption Euler equation first appears in the two-period model. A household lives two periods with log utility and discount factor β = 0.9, solving max log C₁ + β·log C₂ subject to C₁ + S = Y₁ and C₂ = Y₂ + (1+r)S, with Y₁ = 60, Y₂ = 44 and r = 0.10. (a) Write the intertemporal (lifetime) budget constraint. (b) Derive the consumption Euler equation. (c) Solve for C₁, C₂ and saving S. (d) Does the household borrow or save, and why?

The intertemporal budget line runs through the endowment (Y₁, Y₂) with slope −(1+r). Choosing a point to the LEFT of the endowment (less C₁ than current income) means the household SAVES; to the RIGHT means it BORROWS against future income. The optimum is the tangency of this line with the highest reachable indifference curve.

3(a) Eliminate S: from the period-2 constraint, S = (C₂ − Y₂)/(1+r); substitute into the period-1 constraint to collapse both into the lifetime budget constraint C₁ + C₂/(1+r) = Y₁ + Y₂/(1+r).
4(b) The first-order conditions (by substitution or Lagrange) give 1/C₁ = λ and β/C₂ = λ/(1+r). Combining them yields the Euler equation 1/C₁ = β(1+r)·(1/C₂), i.e. C₂ = β(1+r)·C₁.
3(c) Substitute the Euler equation into the lifetime constraint: C₁ + β(1+r)C₁/(1+r) = C₁(1+β) = W, where lifetime wealth W = Y₁ + Y₂/(1+r) = 60 + 44/1.1 = 100.
3Solve for the levels: C₁ = W/(1+β) = 100/1.9 ≈ 52.63, and C₂ = β(1+r)C₁ = 0.9·1.1·52.63 ≈ 52.11.
3(d) Saving S = Y₁ − C₁ = 60 − 52.63 = 7.37 > 0, so the household saves: first-period income (60) is high relative to second-period income (44), so to smooth the log-utility consumption path it moves resources forward by saving.

Lifetime budget C₁ + C₂/(1+r) = Y₁ + Y₂/(1+r); Euler equation C₂ = β(1+r)C₁; C₁ ≈ 52.6, C₂ ≈ 52.1, S ≈ 7.4 — the household is a saver.

Sia tip — With log utility the marginal propensity to consume out of lifetime wealth is the clean constant 1/(1+β) — memorise it. The sign of saving is driven by the income tilt (Y₁ versus Y₂/(1+r)), while the interest rate reshapes that tilt. In the exam, write the Euler equation explicitly before plugging in numbers — that is where most of the marks sit.

Glossary

Key terms

Micro-foundations: Deriving macroeconomic relationships from the optimising behaviour of individual households and firms rather than assuming aggregate rules; the organising principle of the whole unit.
Euler equation: The intertemporal optimality condition u'(C_t) = β(1+r)·u'(C_{t+1}): marginal utility today equals the discounted, return-weighted marginal utility tomorrow. Reused (with tweaks) in every dynamic model in the course.
IES (intertemporal elasticity of substitution): 1/σ — how willingly a household shifts consumption across time when the price of future consumption (the interest rate) changes; governs which of the substitution, income and wealth effects dominates.
Solow-Swan model: The benchmark growth model with an exogenous, constant saving rate: capital accumulation drives catch-up, but long-run per-capita growth equals the exogenous technology rate g, independent of the saving rate.
Golden rule: The steady-state capital stock (and saving rate) that maximises consumption per effective worker, characterised by f'(k*) = n+g+δ; saving above it means dynamically inefficient over-accumulation.
TFP / Solow residual (A): Total factor productivity — the part of output not explained by measured capital and labour; empirically the largest source of cross-country income gaps, and famously called the measure of our ignorance.
DSGE: Dynamic Stochastic General Equilibrium model — the workhorse framework (Real Business Cycle and New Keynesian) in which optimising agents respond to shocks under rational expectations.
Log-linearisation: A first-order Taylor approximation around the steady state that turns a non-linear DSGE system into a linear one, solvable with linear algebra or numerically via Dynare.
Calvo pricing: A sticky-price mechanism in which each firm can reset its price only with a constant probability (1−θ) per period; the micro-foundation of the New Keynesian Phillips Curve, with average price duration 1/(1−θ).
New Keynesian Phillips Curve (NKPC): The micro-founded aggregate-supply relation π̂_t = β·E_t π̂_{t+1} + κ·ỹ_t: inflation depends on expected future inflation and the output gap (or real marginal cost); purely forward-looking, so it has no intrinsic persistence.
Taylor principle: For a determinate (unique, stable) equilibrium the policy rate must respond more than one-for-one to inflation (φ_π > 1), so the real rate rises with inflation and stabilises it.
Divine coincidence: The property that stabilising inflation also stabilises the output gap; it holds for demand and technology shocks but breaks down under a cost-push shock, which creates a genuine inflation-output trade-off.

FAQ

ECON6002 FAQ

Can AI help me study ECON6002 Macroeconomic Analysis?

Yes — Sia is an AI tutor for ECON6002 Macroeconomic Analysis at University of Sydney. Ask any question from the unit and it explains the concept and the working step by step, grounded in how University of Sydney teaches and assesses it. It builds your understanding — a study aid, not an answer service, and it will not complete your assessments for you.

Where can I find ECON6002 past exam papers or practice questions?

This free guide is a strong starting point: it lays out every topic in the unit, the real assessment structure, key terms and fully worked exam-style examples — all free. For more, work through Tutorials 1-6 (the in-semester test practice) and Tutorials 7-10 (the only official practice for the final) on Canvas, and revisit past exam papers during STUVAC.

You can also ask Sia to generate fresh practice questions in the style of ECON6002 and walk you through the working step by step — it explains how to solve them rather than just handing over answers.

How is ECON6002 assessed — is there a final exam?

Yes. ECON6002 Macroeconomic Analysis is assessed by two online Canvas quizzes (7.5% each, Problem Sets 1 and 2), a 30% supervised closed-book in-semester test covering Topics 1-6 (1 hour, four extended-response questions), and a 55% supervised closed-book final exam covering Topics 7-10 (2 hours plus 10 minutes reading, three questions of four parts each, with a standard log-linearised New Keynesian formula sheet provided).

Both the test and the final are in-person and closed-book.

What makes ECON6002 hard?

The heavy mathematics. ECON6002 is unusually derivation-first: you must be comfortable with constrained optimisation, Lagrangians, the consumption Euler equation, and log-linearising a DSGE model around its steady state.

Students find Topic 8 (the New Keynesian Phillips Curve) and Topic 9 (Monetary Policy) the most demanding — and they are also the most examined on the final — so the effort compounds if you build the optimisation-and-Euler toolkit early.

How should I prepare for the ECON6002 exams?

Work every tutorial by hand and treat derivations as the core skill. Because the exams are closed-book, rehearse each result until you can reproduce it without notes; for the final, learn the provided formula sheet and drill Tutorials 7-10, which the final is built on. Redo past exam papers under timed conditions during STUVAC, and practise stating assumptions and labelling diagrams — that is where the marks are.

What maths do I need for ECON6002?

Constrained optimisation (both the substitution and Lagrange methods), difference and simple differential equations, the CRRA/log-utility Euler equation, and first-order Taylor (log-linear) approximation. If any of these are rusty, shore them up in the first two weeks — Topics 1-2 introduce the exact machinery that every later topic reuses.

Which topics are most heavily examined?

For the final, only Topics 7-10 are examinable, with Topic 8 (the New Keynesian Phillips Curve) and Topic 9 (Monetary Policy in the NK model) carrying the two extended-response questions. The in-semester test covers Topics 1-6. The earlier growth and RBC topics are foundational for the final but are not directly examined there.

Is this study guide official or affiliated with the University of Sydney?

No. This is a free, independent study guide created by AskSia to help students learn ECON6002 Macroeconomic Analysis. It is not produced by, endorsed by, or affiliated with the University of Sydney. Always check the official unit outline on Canvas for the definitive syllabus, weights and dates.

Chapter questions

Questions students ask in each ECON6002 chapter

Can AI help me with one-period macroeconomic models?: Yes — ask Sia to walk through any one-period macroeconomic model problem or concept step by step, the way University of Sydney tests it. Sia is an AI tutor that explains the derivation — setting up the household or firm problem, taking the first-order condition, and signing a comparative-static shock — so you understand the method rather than just seeing an answer. Chapter 01 · One-Period Macroeconomic Models
Is the two-period model on the ECON6002 exam?: Yes. Topic 2 is examined by the 30% in-semester test (midterm), which is closed-book with no formula sheet and covers Topics 1–6. The final exam only tests the New Keynesian topics (7–10), so the two-period model is a midterm asset. Practice comes from Tutorials 1–6. Chapter 02 · The Two-Period Model
Can AI help me with the Solow-Swan growth model?: Yes — ask Sia to walk through any Solow-Swan growth model problem or concept step by step, the way University of Sydney tests it. Sia is an AI tutor that explains each stage of a derivation — collapsing to intensive form, writing k̇ = s·f(k) − (n+g+δ)k, solving for k*, or applying the golden rule — so you can reproduce it yourself in the closed-book test. It is a study aid that builds your understanding, not an answer service. Chapter 03 · The Solow-Swan Growth Model
Can AI help me with growth accounting and the Cass-Ramsey model?: Yes — ask Sia to walk through any growth-accounting or Cass-Ramsey problem or concept step by step, the way University of Sydney tests it. It is an AI tutor that explains the derivation — the development-accounting decomposition, the Euler equation, the modified golden rule — so you learn how to reproduce it in the closed-book test, rather than an answer service. Chapter 04 · Growth Accounting & the Cass-Ramsey Model
Can AI help me with the Real Business Cycle (RBC) model?: Yes — ask Sia to walk through any Real Business Cycle model problem or concept step by step, the way University of Sydney tests it. Sia is an AI tutor that explains: give it a household problem, an Euler-equation derivation, or the δ=1 guess-and-verify, and it talks you through the mechanism and the algebra rather than just handing over a final answer, so you can reproduce the derivation yourself in the closed-book test. Chapter 05 · Real Business Cycle Model, Part 1
Can AI help me with the Real Business Cycle model and log-linearisation?: Yes — ask Sia to walk through any Real Business Cycle log-linearisation or DSGE-solution problem or concept step by step, the way University of Sydney tests it. Sia is an AI tutor that explains the method — finding the steady state, applying the two log-linearisation rules, checking Blanchard–Kahn determinacy, reading an impulse response — so you can reproduce it yourself in a closed-book exam. It builds your understanding rather than doing your assessments for you. Chapter 06 · Real Business Cycle Model, Part 2
Can AI help me with nominal rigidities and the New Keynesian model?: Yes — ask Sia to walk through any nominal-rigidities or New Keynesian model problem or concept step by step, the way University of Sydney tests it. Sia is an AI tutor that explains the derivation — the CES markup, Calvo duration, natural output, or the dynamic IS curve — building your understanding rather than handing over answers, so you can reproduce it yourself in a closed-book exam. Chapter 07 · Nominal Rigidities & the New Keynesian Model
Is the New Keynesian Phillips Curve on the ECON6002 exam?: Yes, and it is one of the most heavily examined topics. Topic 8 is examinable on the 55% closed-book final (which covers Topics 7–10 only, not the in-semester test), where it typically anchors an extended-response question — derive the NKPC from Calvo pricing, state it in both forms, solve it forward, and discuss its properties. The final provides a formula sheet with the standard log-linearised NK model, and practice comes from Tutorials 7–10. Chapter 08 · The New Keynesian Phillips Curve
Is monetary policy in the NK model on the ECON6002 exam?: Yes — heavily. Topic 9 is one of the two extended-response topics on the 55% final exam (the other is Topic 8, the NKPC), and Q2 and Q3 are built on them. Any Topic-9 idea can also appear in the Q1 True/False/Uncertain set. The final is closed-book but provides a standard log-linearised NK formula sheet, so marks come from deriving the closed-form solution, signing the shock responses and stating the Taylor principle — not recall. Practice comes from Tutorials 7–10. Chapter 09 · Monetary Policy in the NK Model
Can AI help me with financial frictions and macroprudential policy?: Yes — ask Sia to walk through any financial-frictions or macroprudential-policy problem or concept step by step, the way University of Sydney tests it. It is an AI tutor that explains the derivation — log-linearising the credit spread, the two-type Euler equations, the Tinbergen two-instruments argument — so you learn to reproduce it in the closed-book final, rather than an answer service. Chapter 10 · Financial Frictions & Macroprudential Policy

Study strategy

How to study for the exam

Treat ECON6002 Macroeconomic Analysis at the University of Sydney as a single method drilled ten times rather than ten separate topics: master constrained optimisation, the Euler equation and log-linearisation once and you reuse them to the end.

Start from the unit outline on Canvas to confirm the topic weights, then work every tutorial by hand — the in-semester test practice is Tutorials 1-6 plus Online Quiz 1, and the final's only practice set is Tutorials 7-10, so over-invest there (especially the NKPC and monetary-policy topics that carry Q2 and Q3).

Because both tests are closed-book, rehearse derivations until you can reproduce them cold; for the final, learn the provided formula sheet's log-linearised NK model so you spend exam time deriving, not recalling.

Use STUVAC to redo past exam papers and practice questions under timed conditions, write out the True/False/Uncertain explanations in full (the marks are in the mechanism plus one boundary case), and if you are chasing an HD, drill the comparative-statics twists — divine coincidence versus cost-push trade-offs, over- versus under-saving relative to the golden rule — that separate a Distinction from a High Distinction.

WAM-conscious students should not neglect the two 7.5% Canvas quizzes, which are the cheapest marks in the unit. Ask Sia to generate similar practice questions and to check each step of your derivations as you go.

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