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Transcript
ECONOMICS 3080 INTERMEDIATE MACROECONOMIC THEORY Spring 2001 Instrnctor: Professor Fred R. Glahe Prerequisites: Econ I 0000 or 2020 and, Econ 1078 and Econ 1085, or equivalent. Lecture: 12:30 - 1:45, Tuesday and Thursday. Text: MACROECONOMICS: Theories & Policies, 6th Ed, by Richard T. Froyen Workbook: Study Guide to MACROECONOMICS, by Lawrence S. Davidson Office: Room 105, Economics Building Office Hours: 2:00 - 3:30, Tuesday and Thursday, or by appointment. Office Phone: 303-492-5186 e-mail: [email protected] Home Phone: 303-443-1716 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 l 9thcentury 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. 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.F. Kennedy. 3. Richard Nixon said, "we're all Keynesians now." Vil. 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 Keynesian ism. 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. VIII: 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 (perhaps 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 final examination on the date and at the time specified by the College of Arts and Sciences. Date Topic Text Assignment (pages) January 16 Introduction to Course 1-12 January 18 Measurement of National Income 13-30 January 23 The Classical System I 31-48 January 25 The Classical System I 31-48 January 30 The Classical System I 31-48 February 1 The Classical System II 49-65 February 6 The Classical System II 49-65 February 8 The Classical System II 49-65 February 13 The Keynesian System I 66-92 February 15 The Keynesian System I 66-92 February 20 The Keynesian System I 66-92 February 22 Test I February 27 The Keynesian System II 93-132 March 1 The Keynesian System II 93-132 March 6 The Keynesian System II 93-132 March 8 The Keynesian System III 133-154 March 13 The Keynesian System III 133-154 March 15 The Keynesian System III 133-154 March 20 The Keynesian System IV 155-189 March 22 The Keynesian System IV 155-189 March 27 Spring Break, No Class March 29 Spring Break, No Class April 3 Monetarism April 5 Test II April IO Monetarism 190-211 April 12 Monetarism 190-211 April 17 Keynesianism vs. Monetarism 212-231 April 19 Keynesianism vs. Monetarism 212-231 April 24 New Classical Economics 232-251 April 26 New Classical Economics 232-251 May 1 New Classical Economics 232-251 May3 Last Day of Class 190-211