Download ECON 2020-500 Principles of Macroeconomics

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The University of Colorado - Department of Economics
Fall Semester 1993
Principles of Econorn1cs - 1·~1acro
Course Sv1labus
Mon., Wed., Fri. - 3:00-3:50 pm.
Instructor: Douglas A Ruby
Of fl ee: Econ 309c, Office Hours: M, W, 1:30-3:00pm
Teachino Assistant: James Lynch -- Office Econ 308
Required Materials:
Parkin, Mtchaei., Macroeconom1cs. 2nd Ed., 1993, Addison-Wesley,
Read ing MA
Krugman. Pau l. The ~.ge of Diminished Expecta tions. 1992, MIT Press,
Cambridge, MA
Optional:
Wurman, Richard Saul, A Siegel, K. M. Morris, The Wal I Street .,,Journal Gui de
to UnderstandJng Money and Markets. 1990, Access Press . New York.
Description:
· Prtnciples or r-1acroeconom1cs ls des1gned to Introduce the student t.o the
basic tools and methodology of aggregate economic analysis. Topics will
Include the study of national tncome accounting; the use of fiscal and
monetary 1ntervention to address the problems of inflation, unemployment,
and economic stability; and to study the international aspects of economic
po licy.
Course Grade:
Your grade will be based on rectt.atton act1v1ttes (worksheets, quizzes .
and parttclpat ton ) worm 1oo points. a snort paper CS-7 pages) wort!, so
points} in add ition to your pert ormance on two I 00 poi nt midterm exams.
and a final exam worth 150 points.
"&on
iozo. course :Syllabus, rau
1tJtJ3
Week of:
Top1c
Aug. 25
Aug.30
Introduction to basic economic concepts.
The problem of economics: the allocation of scarce
resources to meet unlimited wants. The development of economic thought. Production and production possibilities.
Ch. 3
Production, specialization, and exchange. The
notion of comparatfve advantage and gains
Ch. 3
from trade. <Read Krugman. Ch. J-3)
The market system and the concept of equilibrium.
Supply and Demand theory.
Ch. 4
The behavior of markets continued: market
intervention. non-existent markets. and arbitrage. Ch. 4
Sept. 6
Sept. 13
Sept. 20
Text
Ch. 1 & 2
mead Krugman. Cti, 4-6)
... Exam •t •
Sept. 27
Oct. 4
The structure of the American economy: A look
at economic institutions: households, business
firms, the financial sector, and government.
An introduction to macroeconomics and macroeconomic problems: unemployment, infl~tion,
growth and business cycles. The Deficit.
Ch.
5. 17
<Read Krugman. Ch 8- JO).
Oct. 11
Oct. 18
Oct. 25
Nov. 1
Nov. 8
Measuring economic performance through national Ch. 6
income accounting. Real vs. nominal variables.
pp. 381-38 S
Measures of international economic activity
and the Balance of Payments (BOP). Exchange
rate determination.
Ch. 18. 19
Aggregate Demand. Aggregate Supply,· and macroeconomic equilibrium. Potential GDP vs. actual GDP.
Productivity and growth.
Ch. 7
* Exam •2 •
The demand-side of the aggregate economy:
determinants of consumption, investment.
government and net-export expenditure.
Income determination and the role of the
multiplier. Government intervention: the use
and impact of fiscal policy on income.
employment and prices.
Ch.8
Ch.9
,.
Econ 2020. Course Syllabus. Fall 1993.
week or:
Toptc
Text
Nov. 15&22 Money, alternative financial instruments. and the
financial system of the United States.
(Bead Krugman, Ct"l 7, 11-13)
_
Ch. 10. 11
Nov. 29
The Federal Reserve System and the execution of
monetary policy. The interaction of money supply.
money demand and interest rate determination
Ch. 12
Dec. 6
The impact and effectiveness of fiscal and
monetary policy on economic activity. Inflation.
inflationary expectations and the Phillips Curve.
Ch. 14-16
• FinaJ E:iam -- Date: Dec. 14, 1q93 -- Time: l l:30-2:30pm •
Additional material for course lectures may be found in the follow'ing
sources:
Galbraith. John Kenneth. Money: Whence It Came, Where It Went, 1975,
Bantam Books. New York.
Greider. William. Secrets of the Tempie: How the Federal Reserve Runs the
Country, 1987. Simon & Schuster Inc.. New York
Heilbroner. Robert L.. The Making of Economic Society, 1962. Prentice-Hall.
Inc. Englewood Cliffs. N.j.
Heilbroner, Robert L., The Worldly Philosophers, 1980, Prentice-Hall Inc.
Englewood Cliffs. N.J.
Economic Report of the President, 1993. U.S. Government Printing Office.
Washington D.C..1993.
University of Colorado - Department of Economics
Fall Se mester 1993
Econ 2020-
Written Assignment
In this paper, I would like you to discuss in detail one of the major problems
facmg the aggregate economy of the United States. Possible topics include the
following:
1) The Federal Budget Deficit and its effect on financial markets .
interest rates. economic growth, and its burden on future generations.
What specific policies could reduce the size of the deficits? How does the
deficit-reduction package recently passed in Washington specifically
address this problem?
2) The Ban.king Crisis (i.e ., the Savings and Loan crisis and its spillover into the C-0mmercial Banking system). What is the nature of this
crisis and what are possible solutions to the problem over and above
federal government bail-outs. Will this problem get worse in the near
future?
3) The Trade Deficit or Current Account Deficit. Do these deficits
represent a problem for the American economy? If so, why? What
are the causes and what are the possible solutions to this problem. Hov
has the trade-deficit affected the value of the dollar on foreign-exchange
markets. What industries are hurt by a weak.er doHar?
You may write about other problems and issues (i.e., the environment, education,
health care, or perhaps other topics addressed in your Krugman text} with approval
of the instructor.
Potential sources to support your discussion should include any of the local or
national major daily newspapers {i.e., the Denver Post. the Rocky Mountain News.
the New York Times, the Washington Post: or the Wall Street Journal), major
news/business weekly magizines (i.e .. Business Week. the U.S. News and World
Report. Time, the Economist, etc.). or academic/topical journal (i.e., the Journal of
Economic Perspectives or Challenge magizine ). Please document the use of these
sources as used in your paper.
in the form of textnotes, footnotes. or endnotes.
Thi~ paper should be type-written double-spaced and range between five and
~even pages in length. This assignment is due on Monday, November l , 1993.