Download Macroeconomics

Syllabus Proposal
Economics: Macroeconomics
Avi Ifergan
Contact Details:
[email protected] or
0523 58 40 18
I welcome you to contact me on my cell phone any day of the week (except Shabbat), no
later than 10pm. The only thing that I ask is that you don’t say: “I apologize for contacting
you at home / on the weekend” – there is no apology necessary!
I am connected via e-mail 24 hours a day, six days a week at home and I will be glad to
answer your queries or messages. Please do not hesitate to contact me - I welcome
your interest or questions regarding my class.
Attendance: Three-strike policy - absence from more than 25 percent of the classes for
each semester results in automatic failure. If you arrive late to the class, it is your
responsibility to let me know at the end of class so that I can check off your name.
Participation: Your quality participation and input in this class is both valued and
essential! I expect you to devote your full attention to the lecture and discussions in this
class, which means that reading other materials, playing on a palm pilot or conducting
private conversations during class is not acceptable. The open and free-flow of ideas
and debate is encouraged, in a respectful manner (This means not interrupting one
another and listening to each other’s ideas). Finally, students are not to begin closing
books or making other preparations to leave class until the class is dismissed.
It is expected that each student will have prepared for each day's class by completing
the daily reading(s) and/or outside-class assignment(s).
Assessment:
Class Attendance
3 in-class Mini-exams
Exam
10 %
30 %
60 %
The course text is:
PRINCIPLES OF ECONOMICS, N. Gregory Mankiw. third edition
South-Western Publishers
WEEK 1
February 13, 2006
MEASURING A NATION'S INCOME?
-
Defining Macroeconomics, and the difference between microeconomics
Understanding GDP, its components and how it is measured
Real and Nominal GDP and calculating the GDP deflator
Chapter 23
WEEK 2
February 20, 2006
MEASURING THE COST OF LIVING
-
Inflation, the Consumer Price Index and how they are calculated
Problems in measuring the Cost of Living
Substitution Bias, Introduction of new goods and unmeasured quality changes
Producer Price Index
Differences between the GDP Deflator and the CPI
Calculating Dollar amounts from different periods
Real and Nominal Interest Rates
Chapter 24
WEEK 3
February 27, 2006
UNEMPLOYMENT
-
Categories of Unemployment
Measuring Unemployment
Calculating the Unemployment Rate and Labor Force Participation Rate
Public Policy and Job Search
The Minimum Wage, Unions and Colelctive Bargaining
Theory of Efficiency Wages
Chapter 28
WEEK 4
March 6, 2006
THE MONETARY SYSTEM
-
The Meaning of Money and its functions
M1 & M2
The Federal Reserve System
Banks and the Money Supply
Reserve Ratios and the Money Multiplier
Tools of Monetary Control
Chapter 29
Mini-Exam#1 20 Multiple Choice Questions on Chapters 23,24,28 (10%)
WEEK 5
March 13, 2006
MONEY GROWTH AND INFLATION
-
The Classic Theory of Inflation
Hyperinflation and deflation
Money Supply, Demands and Equilibrium
The Quantity Theory of Money
The Velocity of Money
Inflation Tax
Fisher Effect
Shoeleather costs and Menu costs
Chapter 30
WEEK 6
March 20, 2006
OPEN ECONOMY MACROECONOMICS: BASIC CONCEPTS
-
The difference between Open and Closed Economies
Exports, Imports and Net Exports
Net Capital Outflow
Savings, Investments and the relationship to International Flows
Nominal & Real Exchange Rates
Purchasing Power Parity Theory and Arbitrage
Chapter 31
WEEK 7
March 27, 2006
MACROECONOMIC THEORY OF THE OPEN ECONOMY
-
The difference between Open and Closed Economies
The Market for Loanable Funds
Real Equilibrium in an Open Economy
The Effect of Tariffs and Import Quotas on the Exchange rate
The Effects of Capital Flight
Chapter 32
Mini-Exam#2 20 Multiple Choice Questions on Chapters 29,30,31 (10%)
Pesach Break March 30 – April 23
WEEK 8
April 24, 2006
AGGREGATE DEMAND & AGGREGATE SUPPLY
-
Recessions, Depressions
The basic model of aggregate demand and aggregate supply
The Wealth Effect, The Interest Rate Effect, The Exchange Rate Effect
Misperceptions Theory, Sticky-Wage Theory, Sticky-Price Theory
Stagflation
- Policy Responses to Recession
Chapter 33
WEEK 9
May 1, 2006
THE INFLUENCE OF MONETARY AND FISCAL POLICY
ON AGGREGATE DEMAND
-
The Theory of Liquidity Preference
The Crowding and Multiplier Effect
Automatic Stabilizers
Chapter 34
WEEK 10
May 8, 2006
THE SHORT-TERM TRADEOFF BETWEEN INFLATION & UNEMPLOYMENT
-
The Phillips Curve
Expectations and the Short-run Phillips Curve
Natural Rate Hypothesis
The role of supply shocks
The cost of reducing inflation and the Sacrifice Ration
The Volcker Disinflation and the Greenspan Era
Chapter 35
Mini-Exam#3 - 20 Multiple Choice Questions on Chapters 32,33,34 (10%)
May 15 – No Classes
WEEK 11
May 22, 2006
PRODUCTION & GROWTH
-
The factors of production
The production function
Government policies that raise productivity and living standards
The Importance of savings and investments
Diminishing Returns and the Catch-Up Effect
Education and the Brain-Drain
Chapter 25
WEEK 12
May 29, 2006
CURRENT ISSUES IN MACROECONOMICS
1.
2.
3.
4.
5.
Should monetary and fiscal policymakers try to stabilize the economy?
Should monetary policy be made by rule rather than by discretion?
Should the central bank aim for zero inflation?
Should the government balance its budget?
Should the tax laws be reformed to encourage saving?
Chapter 36