Download ECON 408-001 Intermediate Macroeconomic Theory

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INTBRMBDIATB HACROBCONOMIC TBBORY
BCONOKICS 408
SECTION 1
SPRING 1988
CLASS HRS:
1:00-1:so K1fl'
THOMAS CARR
CLASSROOM: BCON 13
OPPICB: ECON 401
OPPICB HRS:
12:00-1:00 M1f(_. 1-<!L ·.
Vl' - ~·.
3D
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SUBJBCT
xacroeconomica i• th• atudy of the economy in the aggregate.
The analyaia centers on the factor• determining the level of
national output, employment, inflation, and interest rates.
There is considerable disagreement between various schools of
macroeconomic thought about how the economy works.
The
differences in theory lead to different policy prescriptions.
This course will provide an analytical framework to examine the
macroeconomic problems, evaluate the dominant macro theories, and
allow you to draw your own conclusions about how the economy
functions.
READINGS
1) Froyen, Richard T., Macroeconomics 2nd ed., Macmillian
Publishing Co. 1986.
2) Readings package at Kinko's on the Bill, 1313 College.
3) Recommended newspapers and magazines: Wall street Journal,
Business Week, Barron's, The Economist, Newsweek, Time, etc.
EXAMS AND GRADING
The course grade is weighted by the following factors:
Midterm 1
30%
30%
Midterm 2
Final Exam
.!Q! (comprehensive)
100%
In borderline cases, factors such as class participation,
motivation, and upward progress are considered. The midterm and
final exaas are essay tests.
Bring bluebooks for these exams.
Makeup exams are not given as a matter of course policy.
1
READING
OUTLID
Introduction
A. Background of Major Theories
B. Macroeconomic Indicator•
I. Claaaical Bconoaio•
A. say'• Law
B. output and Baployaent
C. LOanable J'UDda
D. Quantity Theory of Money
•· General Bquilibriua
~. The Great Depression
Chap. 3
Chap. 4
Scardino-NYT
II. Keynesian Bconoaics
A. Keynes: General Theory
1. Income Determination Model
a. consumption Punction
b. Investment: KBC
c. Income Equilibrium
2. Keynes' Monetary Theory
a. Honey Demand: Liquidity
b. Interest Rate Theory
*** MIDTERM I***
Chap. 1
Chap. 2
Winkler-WSJ
Keynes
Chap. 5
Chap. 6
(p.128-142)
Monday, February 15
B. Meo-Keynesian: The Neoclassical-Keynesian synthesis
Chap. 6
1. IS-LM Model
(p.142-176)
a. LM: Honey Market
b. IS: Product Market
c. Interest Rate-Income Equilibrium
d. Policies and case studies
Chap. 7
2. Aggregate Supply and Demand Model
Chap. 8
a. Aggregate Demand and IS-LM
b. Aggregate supply and Labor
c. Price Level-output Equilibrium
Okun
d. Policies and Supply Shocks
III. Monetarism
A. Modern Quantity Theory
1. Priedlllan'• Money Demand
2. Money and Incoae
B. output and Inflation
1. Natural Rate of Unemployment
2. LOng Run Phillips curve
c. Policies and case studies
IV. New Classical Bconomics
A. Rational Bxpectations Hypothesis
B. Policy Ineffectiveness Postulate
••• MIDTBRM II***
2
Monday, March 21
Chap. 9
Chap. 10
Friedman
Clark-WSJ
Economist
Chap. 11
Mccallum
v.
Other Keyneaian Diviaions
A. Poat-Keynesian•
B. Diaequilibriwa
Keynon
summary: Macroeconomic Theories
Chap. 12
Klamer
VI. Bxtenaiona of the Models
A. ConsWDption
1. Peraanent Incoae Hypothesis
2. Life cycle Bypotheaia
B. Inveataent
1. Accelerator Models
2. Beoclaaaical Model
c. Money Demand
1. Inventory-Thoeretic Approach
2. Portfolio Balance Theory
Chap. 13
VII. Growth and supply-side Economics
A. Growth and Productivity
B. supply-side Economics
Chap. 16
Feldstein
Blinder
VIII. International sector
Chap. 17
*** FINAL EXAM***
Wed., May 4, 1988, 7:30 am to 10:30 am
3
Chap. 13
(p.36,-385)
(p. 385-407)
Chap. 14