Download ECON 3080-001 Intermediate Macroeconomic Theory

ECONOMICS 3080-001
INTERMEDIATE MACROECONOMIC THEORY
Fall 2002
Instructor: Professor Fred R. Glahe
Prerequisites: Econ 10000 or 2020 and, Econ 1078 and Econ 1085, or equivalent.
Class Meeting: 2:00 - 2:50, MWF, BESC 185
Text: MACROECONOMICS: Theories & Policies, 7thEd, by Richard T. Froyen
Workbook: Study Guide to MACROECONOMICS, by Lawrence S. Davidson
Office: Room 105, Economics Building
Office Hours: MW 3:00 - 4:00, F 3:00 - 3:30, or by appointment.
Office Phone: 492-5186
E-mail: [email protected]
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 l 930's led economists 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 ofKeynesianism
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."
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
mcrease.
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)
August 26
Introduction to Course
1 - 14
August 28
Measurement of National Income
15 - 33
August 30
Measurement of National Income
15 - 33
September 2
Labor Day - No Class
September 4
The Classical System I
36 - 59
September 6
The Classical System I
36 - 59
September 9
The Classical System I
36 - 59
September 11
The Classical System I
36 - 59
September 13
The Classical System II
60- 79
September 16
The Classical System II
60 - 79
September 18
The Classical System II
60 - 79
September 20
The Classical System II
60- 79
September 23
The Keynesian System I
80 - llO
September 25
The Keynesian System I
80 - 110
September 2 7
The Keynesian System I
80 - llO
September 1
The Keynesian System I
80 - 110
October 2
Test I
October 4
The Keynesian System II
111-152
October 7
The Keynesian System II
111 - 152
October 9
The Keynesian System II
111-152
October 11
Fall Break, No Class
October 14
The Keynesian System III
153-177
October 16
The Keynesian System III
153-177
October 18
The Keynesian System III
153-177
October 21
The Keynesian System III
153-1 77
October 23
The Keynesian System IV
178 - 215
October 25
The Keynesian System IV
178 215
October 28
The Keynesian System IV
178 - 215
October 30
The Keynesian System IV
178-2 15
November 1
Monetarism
216 - 237
November4
Monetarism
216 - 237
November 6
Test II
November 8
Monetarism
216 - 237
November 11
Monetarism
216 - 237
November 13
Keynesianism versus Monetarism
238 - 258
November 15
Keynesianism versus Monetarism
238 - 258
November 18
Keynesianism versus Monetarism
238 - 258
November 20
New Classical Economics
259 - 279
November 22
Thanksgiving Holiday - No Class
November25
New Classical Economics
259 - 279
November27
New Classical Economics
259 - 279
November29
New Classical Economics
259 - 279
December 2
New Classical Economics
259 - 279
December 4
Real Business Cycles
280 - 289
December 6
Real Business Cycles
280 - 289
December 9
New Keynesianism
289 - 297
December 11
Last Day of Class - Review for Final
Disability Statement
If you have specific physical, psychiatric, or learning disabilities and
require accommodations, please let me know early in the semester so that
your learning needs may be appropriately met. You will need to provide
documentation of your disability to the Disability Services Office in
Willard 322 (phone 303-492-8671).