Download UNIVERSITY OF VERMONT DEPARTMENT OF ECONOMICS

UNIVERSITY OF VERMONT
DEPARTMENT OF ECONOMICS
EC 11
Principles of Macroeconomics
Fall 2013
Prof. Stephanie Seguino
Office: Old Mill 340
Phone: 802.656.0187
Office Hours: T/TH 1-2pm
(or by appointment)
SYLLABUS
COURSE OBJECTIVES
Macroeconomics examines the behavior of the economy as a whole – at the national level. Today’s economic
climate underscores the relevance of studying macroeconomics. High unemployment in the US and in other
countries, debates about deficits and debt, rising inequality, and ecological degradation all pose challenges that
require public engagement to identify viable fresh ideas and policy solutions. A key objective of EC 11 is to
improve your ability to read about current events, understand the economic issues involved, and evaluate public
debates on economic policies.
Among the topics we will explore are the determinants of economic growth and differences in income and wellbeing across countries. We also will examine economic fluctuations – the causes of high unemployment and
inflation, as well as the possible remedies.
Understanding how the economy works on a macroeconomic level will help you develop well-reasoned answers
to questions like:
 How much better off are Americans today than in the past?
 Can government policies promote faster economic growth?
 Can government policies prevent or shorten a recession?
 How do banks create money?
 How have policymakers responded to the housing crisis and credit crunch that began in summer 2007 and to
the recession that followed?
 What is the “Fed?” Has it done enough to promote economic recovery?
 What are the arguments for and against budget cuts to reduce the federal deficit and debt?
 Is economic growth compatible with ecological sustainability?
TEXTBOOKS
All of the below listed books are required reading and will be available for sale at the bookstore. The
first two books below are sold as one unit at the UVM bookstore. In addition to the required texts, further reading
is listed in the syllabus, and in some cases, is posted on the Blackboard site for this course. We will occasionally
watch video clips and discuss current newspaper articles in class. All such material is considered part of required
reading for the course for exam purposes.
1. Colander, D. 2013. Macroeconomics (9th Edition). McGraw Hill.
2. Colander, D. and J. Gamber. 2013. Study Guide for Macroeconomics 9th edition. McGraw-Hill.
3. Dollars and Sense. Real World Macro (30th Edition). Dollars and Sense.
Last revised August 21, 2013
GETTING HELP/ASKING QUESTIONS
My office hours are noted at the top of the syllabus. You do not need an appointment to see me during that time.
Just stop by. The only occasion on which you should use email in contacting me is in the case of a medical
emergency.
Mitchell Philbin is our undergraduate teaching assistant (UTA) for this course. He will be holding two
review/discussion sessions each week. Attendance at these sessions is not required. There are, however, some
incentives to participate, noted below under Course Requirements.
Email
Review/discussion sessions
[email protected]
M and W, 7pm, Angel B112
POLICIES
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Exam dates are fixed and will not be changed. Exams can only be taken on the announced dates
and times.
Assignment due dates are tentative, and may be changed. Make sure to check syllabus and BB for
changes.
No make-up exams.
Late assignments will not be accepted. Assignments are due at the start of class in which they are
due.
Cell phones turned off and computers/iPads closed and out of sight during class.
Calculators (including those on cell phones) are not permitted during exams.
For ease of handing in and out papers, each student will be assigned a number (a simple number,
between 1 and 140), and this number should be placed on the top right of every assignment you
hand in, including group assignments. Your number will be posted on Blackboard under the
Grading section after the add-drop period.
ATTENDANCE
Attendance is required in order to do well in this course for a host of reasons.
 First, macroeconomics is taught in a building block fashion. In order to be able to understand the material
as it becomes more complex throughout the semester, it will be important for you to master the tools
learned early in the semester.
 Second, much of what I discuss in class in lectures is not covered in the book, including spontaneous
discussions of economic news. The textbook is only a supplement.
 Third, roughly on a weekly basis, there will be some in-class activity or assignment that will require
turning in a paper at the end of class. These assignments are not eligible to be made up if you are absent.
GRADING
DATE
ASSIGNMENT
October 1
October 31
December 10
Throughout semester
Exam 1
Exam 2
Comprehensive final exam
Short papers, problem sets,
WEIGHT
2
25%
25%
25%
25%
Last revised August 21, 2013
team projects, in-class activities
(total of 10; lowest grade of in-class assignments dropped)
SHORT PAPERS, PROBLEM SETS, TEAM PROJECTS, AND IN-CLASS ACTIVITIES
I will periodically ask you to write short answers to problems based on the lecture, answer questions on the Real
World Macro or other readings, or organize group exercises in class related to the material we are studying.
Assignments will be turned in at the end of class. (To help you prepare, I have prepared a list of questions to think
about when reading the assigned articles. These are posted to BB). I will also assign at least 3 short projects, and
due dates are noted in the syllabus. There are no make-ups for these assignments, but at the end of the semester I
will drop the lowest score, so you can miss one in class assignment without penalty. Failure to turn in any of the
short projects, however, will result in a zero for that assignment.
The table below indicates how I will grade these assignments. In cases where the work is really exceptional, I’ll
award a check-plus-plus so it’s equivalent to 5 points of extra credit.
Grade
✓+
✓
✓0
Points
100
75
50
0
Meaning
Excellent
Average/Good
Sub-par
Fail/Absent
WEEKLY DISCUSSION SESSIONS
Students may participate in weekly discussion/review sessions. Attendance and participation are optional.
However, by attending these sessions, students can add points to their midterm and final exam scores (one point
maximum per week of attendance). These sessions will begin one to two weeks after the first class, depending
upon how soon rooms are made available.
THE STUDY GUIDE
One of the best ways to learn is by doing. To that end, I have ordered the Study Guide for you to practice various
concepts and materials covered in class. For example, we will discuss supply and demand in second week. By
going through the questions in the Study Guide on this topic after the class lecture, you will understand this
material much better than by simply passively absorbing lectures. The combination of extensive notes taken
during lectures and doing practice problems will help you immeasurably. The initiative and discipline to do
practice problems, however, is going to be largely under your control. I will only occasionally assign problems to
be turned in, and may use some problems from the Study Guide for in-class exercises. I’ve posted to BB a list of
questions or problems in the Study Guide that will offer you some good practice. Each week, consult the list of
suggested questions/problems for that week and answer them. If you have difficulties, you can bring these to the
weekly discussion sessions and ask Mitch to help you with them or see me. Working on groups on these exercises
is ideal.
ACADEMIC INTEGRITY
Standards of academic conduct are set forth in the University's Code of Academic Integrity.
http://www.uvm.edu/policies/student/acadintegrity.pdf
3
Last revised August 21, 2013
By registering, you have acknowledged your awareness of the Academic Integrity Code, and you are obliged to
become familiar with your rights and responsibilities as defined by the Code. Violations of the Academic Integrity
Code will not be treated lightly, and disciplinary actions will be taken should such violations occur. Please see
me if you have any questions about the academic violations described in the Code in general or as they relate to
particular requirements for this course.
In writing papers, you must properly cite all sources (1) directly quoted, (2) paraphrased, or (3) consulted in any
fashion. Sources include all printed material as well as the Internet. It is also considered plagiarism if you merely
rework source material, placing an author's thoughts in other words without contributing your own ideas. For that
reason, you must include some kind of source citation or note whenever drawing on someone else's interpretation.
4
Last revised August 21, 2013
TENTATIVE COURSE SCHEDULE – SUBJECT TO CHANGE
Topics, Readings, and Assignments
Preliminary course outline
The following schedule is tentative. It may be revised as the semester progresses. Additional readings may be
added. Please check this syllabus on Blackboard for updates. I update the header (top right of page) with the date
the syllabus was last revised so that you will know if you have the most recent version. All readings are required,
unless otherwise noted. RWM refers to your Real World Macro book.
Week
1
Dates
Aug. 2729
Topic
Economics as a tool to
improve well-being
Required Reading
Colander, 1 & 2
RWM, 8.2: Vasudevan, R.
“Comparative Advantage.”
Key Concepts



Opportunity cost
Production
possibilities frontiers
Scarcity and
abundance
Coordination
problem
Feudalism
Mercantilism
Supply and demand








Invisible hand
Economic growth
Efficiency
Productivity
Say’s Law
Circular flow
Business cycles
Wages and profits

Recessions &
depressions,
Stabilization
The demand-driven
economy
Unemployment
Aggregate demand &
supply
GDP


2
Sept. 3-5
3
Sept. 1012
4
Sept. 1719
Early Economic
Systems
Supply and Demand
No classes.
Origins of Capitalism
Colander, 3 (pp. 71-73 only), 4, &
5
Make-up class Sept. 25, 108
Lafayette, 530 to 630 pm
Colander, 3 and rest of Appendix
A
Adam Smith, The Wealth of
Nations, Book I, chs. 1-3 (BB)
Carr, N. “Is Google Making Us
Stupid?” Atlantic Monthly,
July/August 2008. (Google it!)
5
5
Sept. 24
Sept. 2526
The Great Depression
and the Keynesian
Revolution
Measuring the
aggregate economy
6
Oct. 1
Exam 1
6
Oct. 3
Measurement,
continued: Real and

Homework/
Projects
Colander, 6 & 17 (pp. 363-373
only)
RWM, 2.2: “The Real
Unemployment Rate.”
Colander, 7




Sept. 25 class at 515 to 630 pm,
108 Lafayette

RWM, 2.3: “GDP and Its
Discontents”

5

Real and nominal
prices
Consumer Price
Project due
Sept. 17
(supply and
demand)
Project due
Oct. 8
nominal GDP,
economic growth
The Basic Keynesian
Model
7
Oct. 8-10
8
Oct. 1517
The Basic Keynesian
Model, continued
9
Oct. 2224
Fiscal policy
Money: What it is and
what it does
Monetary Policy and
the Banking System
10
Oct. 29
Lecture, Prof. David
Colander, 4-6pm
Carpenter Auditorium,
Given Hall
10
Oct. 31
Exam
11
Nov. 5
The unemploymentinflation trade-off
11
Nov. 5-7
Deficits and Debt
Index
Colander, 9
RWM, 4.6: “No More Savings!”
Colander, 9w (on McGraw-Hill
website)
RWM, 5.4: “Who Are the 47%?”
Colander, 12 & 13
RWM, 6.1: “What is
Money?”


AS/AD model
Short- and long-run


Multiplier
Automatic stabilizers




Banking system
Money creation
Interest rates
Open market
operations
Fractional reserve
system

RWM, 6.2: “How Do Fiscal
and Monetary Policy
Compare?”
“The US Policy Dilemma
and Why it's going to be
Really Hard to get a Job”
Colander, 18
RWM, 7.1: Vasudevan, R. “The
Relationship Between
Unemployment and Inflation.”
Colander, 15 & 16
Last revised August 21, 2013
(measuring
GDP)




Sources of inflation
Philips curve
Conflict theory of
inflation
Reaganomics
Project due
Nov. 7 (debts
and deficits)
RWM, 5.6: Friedman, G. “Myths
and Realities of Government
Spending.”
12
12
Nov. 12
Nov. 14
The Housing Bubble
and the Great
Recession of 2008
Gender and Race in the
US Economy
Henley, J. ‘Recessions Can Hurt,
But Austerity Kills.” The Guardian.
May 15, 2013.
Colander, 14
RWM, 6.7: “We Are All
Minskyites Now”
RWM, 1.5: Albelda, R. “Under
the Margins: Feminist Economists
Look at Gender and Poverty.”
RWM, 7.7: Boushey, H. “Women
Breadwinners, Men Unemployed”
RWM, 7.6: Alegretto, S. and S.
Pitts. “How Blacks Might Fare in
the Jobless Recovery.”
6



Job segregation
Opportunity
hoarding
Stratification
Last revised August 21, 2013
13
Nov. 1921
The Growth vs.
Development Debate
Colander, 10 & 22
Wisman, J. “The Growth Trap,
Ecological Devastation, and the
Promise of Guaranteed
Employment.” (BB)
RWM, 1.4, Rowe, J. “The Growth
Consensus Unravels
14
Dec. 3
Inequality
TBA
Final Exam Comprehensive
Optional: Erickson, J., et al.
“Vermont Genuine Progress
Indicator
1960-2011.” (BB)
RWM, 3.1, Tilly, C. “ Geese,
Golden Eggs, and Traps: Why
Inequality is Bad for the
Economy.”
7