Download ECON 2020-400 Principles of Macroeconomics

KEEP THIS HANDOUT FOR FUTURE REFERENCE
Macroeconomic Principles, Econ 2020-400.
Instructor: Kishore G. Kulkarni, Ph.D.,
Office Location: Room 10 Basement Economics Building, Phone: (303_
735-5507 on CU campus. Better yet, (303)-556-2675 feel free to
leave messages. Students are also encouraged to send an email on
[email protected] Fax: (303)-556-3966.
Office Hours:
appointment.
Tuesday and Thursday 3.15 PM to 4.30 PM and by
Textbook: 1) “Understanding Macroeconomics” by Dolan and Lindsey,
(Customized by Kulkarni) Horizon Textbook Publishing ISBN : 159602-183-7, 2004.
2) “Principles of Macro-Monetary Theory”, Kishore Kulkarni, Fourth
Edition, Kendall Hunt Publishing Company, Dubuque, Iowa, 2003. A
few other readings assignments will be distributed and referred to
in the class. Use of new technology is recommended.
Course Description and Objectives:
This course focuses on the
overall economic issues of GDP calculation, working of market
system in a capitalistic economy, theories of consumption and
investment, multiplier analysis, Fiscal and Monetary policy making
in the U.S., and monetary theories of Keynes, classical economists
and monetarists.
The main objective is to enable students to
obtain basic understanding of economic thinking. There is also
discussion of some U. S. institutions such as the Federal Reserve
System and commercial banks. The exact sequence of chapters to be
covered is announced in the first class.
This is a demanding class and requires special attention to do
well in it.
Each class session provides abundant notes that
improve understanding of the subject matter. Attendance in all
classes is mandatory, and several absentees with out a convincing
reason may earn an F grade for the course.
There are four tests (including the final) to be taken in the
main class. Recitation class-work is important for 20% of your
grade.
(IT IS IMPOSSIBLE TO PASS THIS CLASS WITHOUT ATTENDING
RECITATIONS) The grades depend upon the absolute performances in
the above tests and the work in recitation class. A surprise (pop)
home assignments serve as the tool to earn bonus points. Usually,
the score of 90% of the total possible points guarantees an A
grade, 80% a B grade,70% a C grade and 60% a D grade. Scores of
less that 60% get F grade. Make-up exams are discouraged and in
case of an emergency all make-up exams are conducted in 13th week
of the semester.
Same NC policy is enforced as is explained in the College
Catalog/class schedule. If a student intends to drop this class,
he/she needs to fill out a drop-slip with the Registrar’s office to
drop the class. See advisors in Economics Department for proper
prodecures.
If you have specific physical, psychiatric or learning
disabilities and require accommodations, please let me know early
in the semester (say first two weeks) so that disabilities may be
appropriately accommodated. You will need to provide documentation
of your disability to the Disability Services Office.
The college policy of observing all religious holidays will be
enforced in this class.
A prior indication of any religious
requirement is necessary.
This course assumes that you are reading the relevant chapters
from the textbooks, and are reviewing the earlier class material.
Asking questions in the class is encouraged, and many times is
reciprocated. In each class rules of common courtesy are strictly
followed.
Do not talk to your neighbor when the class is in
progress. Do not sleep unless advised to do so. Take good notes
and be attentive to answer questions. Have a wonderful semester!
LIST OF TOPICS TO BE COVERED IN Econ 2020 CLASS
Topic 1: A few definitions, (e.g. Economics, Economic system opportunity costs, factors of
production). Quick review of Demand and Supply Laws, their explanations, change in
demand and change in quantity demanded, market demand curve.
Topic 2: Review of Market Equilibrium: The market mechanism and reaching to
equilibrium, Paradox of flexibility, groups of individuals affecting market price,
governmental policy of price control.
Topic 3: Gross Domestic Product: Definition, calculation, approaches to calculate GDP,
limitations of GDP calculation. Other measures of GDP calculation. Use of internet to get
data of US economy.
Topic 4: Classical Economists’ Macroeconomic theory: Say’s Law of Market and paradox
of flexibility. Great Depression and relevance of classical theory. Keynesian response to
great depression
Topic 5: Consumption function: autonomous consumption and mpc, saving function,
investment function, equilibrium of GDP. Big deal of GDP equilibrium.
Topic 6: Changes in investment and GDP: multiplier process mathematical derivation and
explanation. Fiscal policy and Keynesian answer to depressionary economy.
Topic 7: Money and Banking in the US: Types of US money supply, definition of money,
evolution of money, functions of money and barter economy. Banks in the US, function sof
bank and simplified model of money creation. (internet use is recommended)
Topic 8: Control and regulation of Banks: Federal Reserve System: Layers of authority,
their specific functions, ways to change the US money supply. (Use of internet is
recommended).
Topic 9: Monetary theory: Classical economists’ monetary theory, quantity theory of
money, conclusion and criticisms of quantity theory.
Topic 10: Keynesian monetary theory, Keynesian chain, Liquidity of trap and optimum
monetary policy, pegging the interest rate.
Topic 11: Critics of Keynes: Monetarists, Monetarists’ monetary theory, stability of demand
for money, revision of quantity theory, monetary rule, transmission mechanism of monetary
theory according to monetarists. Controversy between Keynesians and monetarists about
optimum monetary policy.
Topic 12: Phillips Curve hypothesis: Its origin, modification, modern times Phillips curve,
policy guidelines using Phillips curve and monetarists’ response to the Phillips Curve
hypothesis.