Download ECON 3080-002 Intermediate Macroeconomic Theory

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ECONOMICS 3080
ECONOMICS 3080-002
INTERMEDIATE MACROECONOMIC THEORY
Fall 2000
Instructor: Professor Fred R. Glahe
Prerequisites: Econ 10000 or 2020 and, Econ
Lecture: 11:00- 11:50, Monday, Wednesday, and Friday
1078
and
Econ
1085,
or
equivalent.
MACROECONOMICS: Theories & Policies , 6 th
, Ed, by Richard T. Froyen
Text:
Workbook:
Study Guide to MACROECONOMICS
by Lawrence S. Davidson
Office Room 105, Economics Building
Office Hours: 3:00 - 3:50, Monday, Wednesday, and Friday, or by appointment.
Office Phone: 492-5186
e-mail: [email protected]
Home Phone: 443-1716
Course Content
I. What are the main themes?
1. Economic growth
2. The general price level
3. Inflation - continuous increase in the price level
4. Prolonged periods of high involuntary unemployment.
II. Classical Economics
1. Ideas of such 18th and 19th century economists such as:
Adam Smith
Thomas Malthus
David Ricardo
James Mill
III. Neo-Classical Economics
1. Begins around 1870 with
Carl Menger
Leon Walras
William Stanley Jevons
F.Y. Edgeworth
A.C. Pigou
and especially Alfred Marshall
2. Keynes calls Pigou's 1931 book, Economics of Welfare, the essence of "classical" economics
IV. High and Sustained unemployment in the U.K. in the 1920' s and in the U.K. and U.S.A. in the 1930's
led economist' s to question the classical view or vision.
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V. Keynes in his 1936 book, the General Theory of Employment, Interest and Money, argued that the
market economy might not be essentially stable.
VI. Acceptance of Keynesianism
1. By 1964 most economists were Keynesians
2. The first Keynesian guided U.S. president was J.P. Kennedy.
3. Richard Nixon said, "we're all Keynesians now."
VII. Break down of Keynesian Monopoly on Economic Ideas
1. Starting in the 1950's Milton Friedman challenges the Keynesian view.
2. Friedman produces a series of theoretical and empirical works which argue against Keynesianism.
These ideas are called Monetarism.
3. Friedman predicts in 1967 that high rates of inflation will cause unemployment to increase.
4. Friedman's predictions come true in the late 1960' s and the 1970' s.
vm.
New Classical Economics
1. Building on Monetarism, economists such as Robert Lucas, argue that monetary and fiscal policy can
only affect the "real" portion of the economy when their use is unexpected. Since it is thought that policy
changes cannot be kept secret in the modern economy, New Classical economists concluded that
anticipated government action can have no impact on the economy. Hence, the economy will , under
.
active or passive government action, tend to be at high levels of employment and economic growth. Since
these are the views of the classical economists (perhap~ even more so) those economists which hold these
views are called New Classical Economists.
There will be two examinations given on the dates indicated below and there will be a fin al examination
on the date and at the time specified by the College of Arts and Sciences.
Date
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Topic
Text Assignment(pages)
1 - 12
August 28
Introduction to Course
August 30
Measurement of National Income
13 - 30
September 1
Measurement of National Income
13 - 30
September 4
Labor Day - No Class
September 6
The Classical System I
31 - 48
September 8
The Classical System I
31 - 48
September 11
The Classical System I
3 1 -48
September 13
The Classical System I
31 - 48
September 15
The Classical System II
49 - 65
September 18
The Classical System II
49- 65
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gCONOMICS 3080
September 20
The Classical System II
49- 65
September 22
The Classical System II
49- 65
September 25
The Keynesian System I
66- 92
September 27
The Keynesian System I
66- 92
September 29
The Keynesian System I
66 - 92
October 2
October4
66-92
Test I
October 6
FALL BREAK
October 9
The Keynesian System II
93 - 132
October 11
The Keynesian System II
93 -132
October 13
The Keynesian System II
93 - 132
October 16
The Keynesian System III
133 - 154
October 18
The Keynesian System III
133 - 154
October 20
The Keynesian System III
133 - 154
October 23
The Keynesian System III
133 - 154
October 25
The Keynesian System IV
155 - 189
October 27
The Keynesian System IV
155 - 189
October 30
The Keynesian System IV
155 - 189
November 1
The Keynesian System IV
155 - 189
November 3
Monetarism
190 - 211
November6
Monetarism
190 - 211
November 8
3 of4
The Keynesian System I
Test II
November 10
Monetarism
190 - 211
November 13
Monetarism
190 - 211
November 15
Keynesianism versus Monetarism
212 - 231
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November 17
Keynesianism versus Monetarism
212 - 231
November 20
Keynesianism versus Monetarism
212 - 231
November22
New Classical Economics
November 24
Thanksgiving Holiday - No Class
November 27
New Classical Economics
232 - 251
November29
New Classical Economics
232 - 251
December 1
New Classical Economics
232 - 251
December4
New Classical Economics
232 - 251
December 6
New Classical Economics
232 - 251
Decembers
Real Business Cycles
252 - 268
December 11
Real Business Cycles
252 - 268
December 13
Last Day of Class - Review for Final
232 - 251
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