Download ECON 408-001 Intermediate Macroeconomic Theory

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Econ. 408
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Spring 1982
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SYLLABUS
This is an intermediate-level course in macro-economics. By definition, this
means we are concerned with economic behavior in the aggregate, that is, at the level
of the system as a whole. Thus we want to find out what determines the level of and
fluctuations (business cycles) in aggregate incorne, · aggr~ate emplo.:yrnent, and the
aggregate price level . We .want to know how society decides to devote resources to
investment in nore capacity to prcxluce goods and services so that the economy can grow.
We want to know what ~ennines the overall level of demand for these goods and
services to see how much of this capacity to produce will be utilized . We want to
understand the role of government insofar as it affects aggregate economic activity
and to understand the role of our nonetary system and the importance of rroney and
interest rates to macroeconomic activity.
In order to understand all this we really have to cane to tenns with what drives
our economic system, with what makes it function or dysfunction. Macroeconomics
deals with many questions that. are of great importance and concern and controversy
in our society today. We will ask what causes unemployment and inflation, is the
economy inherently prone to instability, what can or can't the goverrnnent do about
the economy.
Unfortunately it will not be easy to give answers to these questions . This i s
not because there are no answers to them, but, oddly enough, because +-..here are too
many answers. Macroeconomics is definitely one branch of economics where there is by
no means a consensus as to what the causes of and rerredies for economic problems are.
Thus we will have to familiarize ourselves with nore than one theory of what is
going on in the economy.
f'.bre fortunately the issues involved. in our study will have great relevance to
economic, socia l, and political controversies raging in the w::>rld-at the present rroment. We want to be able at least to understand the issues involved and the argurrents
behind the different positions advocated. But during and even prior to understanding
the "real" w::>rld we will have to deal with certain theoretical abstractions. Please
be patient and realize that this is necessary.
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The textbook for the course is Wallace C. Peterson, Income, Employment, and
Economic Growth. We will supplement it with a packet of readings which will be
available at Kinko's across the street. The readings are of tw::> sorts: theoretical
articles to clear up or to add to topics presented in lecture and newspaper and magazine articles designed to enable us to examine popular presentations of economic problE!IUS which the country is currently facing. Under this las:t_sort .I have ordered a
book, Introductory Macroeconomics 1981-82 by Peter D. lt:Clelland, which contains a
host of economics material from newspapers and magazines that present the major
"real w::>rld" issues we should be able to deal with. I only stumbled upon this booY.
last week, but the Piookstore tells me copies will arrive here by March 1, which is
well- enough before the date we will need to use nost of it. The articles from
tt::Clelland that we will use before March 1 I have put in the Kinko's packet.
_ Grading in this course will be on~ b asis of b'vD test§.. during the term and_
a final exam. The b\D midterms each count 30% of your grade and the final 40%. TJ-.e
midterm
will nost likely be given after we finish 'Ibpic III and after 'Ibpic VI.
The topical divisions of the course and the ~eading pertaining to each are
given below:
'Ibpic I: Overview
Peterson, Chap. 1,2,3
Business Week, "Reagan's Policy Gamble Sets the Investment Climate"
Milton Friedman, "The Relation Between Economic Freedom and Political Freedom"
Joan Rocinson, "An Economist's Semon"
, "The Second Crisis of Economic Theory"
--=--,,,...,,.---,,lt:Clelland, Selections 1,2,3,4,5
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F.con. 408
-2M:)tt
Spring 1982
'lbpic II: Classical and Neoclassical Macroecx:mornics
Peterson, pp. 589-599 and Chap. 4
Michael Evans, "Pre-Keynesian Theories of the Business Cycle"
M::Clelland, Selections 30,31,32
'lbpic III : Keynes
Peterson, Chaps. 5,6 ,7, 8
John Maynard Keyne!3 , "The General Theory"
, "The Postulates of the Classical Economics"
Axel I..eijonhufvud, "Effective Demand Failures"
Friedman, "Fiscal Policy"
'lbpic IV: International Aspects
Peterson, Chap. 9
lbbinson, "Beggar-My-Neig:hl::or Remedies for Unemployment"
Friedman, "International Financial and Trade Arrangements"
M:::Clelland, Selections 61,62,63,64,65
'lbpic V: M:mey
Peterson, Chaps. 10,11
Friedman-, "The control of lt>ney"
lbbinson, "Prices and lt>ney"
M::Clelland, Selections 24 , 25,26 ,27 ,28
'lbpic VI: Surrming-up of Theories
Peterson, chaps. 12 ,16 , and pp. 604-606
Josef Steindl "Prices, costs, and Profit Margins"
lbbinson , "Forew::,rd"
"Kalecki and Keynes"
- - - -', "Marx,
Marshall , and Keynes"
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'lbpic VII: Stabilization and Anti-Infl ation Policy
Peterson, Chaps. 13,14
Keynes, "concluding Notes on the Social Philosophy towards Which the General
Theory Might Lead"
Michal Kalecki, "Political Aspects of Full Employment"
- - -Luxemburg"
-, "The Problem o f Effective Demand with Tugan-Baranovski and Rosa
, "Class Struggle and Distribution of National Incorre"
M::Clelland, Sel ections 6,7,8,9,10,ll,12,13,14,15,16,17,18,19,20,21,22,23,
29 , 33,34 , 35, 38,39 , 40,41,44,45,46,47,48
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