Download PRINCIPLES OF MACROECONOMICS

PRINCIPLES OF MACROECONOMICS
[email protected]
Tel: (802)-656-094
Office: 335, Old Mill
Office Hours: Mondays and Wednesdays 10:30-11:30
or by appointment.
Undergraduate Teaching Aid:
[email protected]
Office: 334, Old Mill
Office Hours: Tuesdays and Thursdays 2:30-3:30.
Class webpage: https://bb.uvm.edu/
~ COURSE DESCRIPTION ~
MAIN TOPICS COVERED
This course is an introduction to a field of economics called Macroeconomics, which looks at
the behavior of the economy as a whole. It is organized around four sections:
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Macroeconomics: Concepts, issues and data
The initial goal of this course is to understand how economists think and what they
study. After introducing a few core principles (such as the cost-benefit principle), we
define and explore production, unemployment and inflation. How do economists
measure them? What do they mean? What is the recent evolution of production,
unemployment and inflation?
The economy in the long run
The behavior of the economy over very long periods of time can be described with
economic growth. Why are economists interested in economic growth? What are the
determinants of growth? In this course, we study the links between economic growth,
productivity and living standards.
We also study financial markets. What are financial markets? What happens when
financial markets do not function properly? We look into the 2008 financial crisis.
Third, we describe the financial system, the process of money creation, and how money
growth relates to inflation.
The economy in the short run
Expansions and recessions are situations that generally last for short periods of time.
What are the causes of recessions or expansions? How to fight a recession? We study
the Aggregate Demand - Aggregate Supply model to understand the effects of fiscal and
monetary policies on output and inflation in the short and the medium run. We relate
recent government policies to economic theory.
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The international economy
When we have extra time at the end of the semester, we study a fourth section related
to the determination of exchange rates, international trade and capital flows.
OBJECTIVE
Introduction to macroeconomic topics, data, and simple models, in order to better understand
current economic issues.
COURSE REQUIREMENTS
Homework assignments: Weigh 25% of the semester performance.
Midterms 1 and 2: Weigh 50% of the semester performance.
Final Exam: Weighs 25% of the semester performance.
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The lowest homework assignment grade and the lowest midterm grade are dropped.
The homework assignments have to be returned in class at the due dates. There is
about one assignment per chapter. Due dates for homework are announced in class.
Since the homework solutions are posted online, late homework cannot be accepted.
In case there is a departmental assessment, this will be included in the homework grade
and weigh 1%.
Extra-credit opportunities are announced in class. They generally relate to press articles
to summarize. In case we have visitors, you will be required to prepare questions. This
preparation will be graded as extra credit.
You are expected to attend all lectures. Homework and exams are essentially lecture
based. Homework due dates are announced in class. Therefore, missing lectures would
seriously put you at risk of failing this class.
You are responsible for checking the class website every week. It contains important
announcements and reminders, course outlines and homework material.
READING
Textbook (mandatory – See “Provisional course schedule”)
Principles of Macroeconomics 5/e by Frank and Bernanke.
Articles (posted on the class web page - See “On-line articles”)
~ PROVISIONAL COURSE SCHEDULE ~
(Chapters from the textbook)
Week
Dates
Reading
1
08/27-09/31
Introduction – A few concepts from
Chapters 1,2 and 3.
2
09/03: Labor day
Chapter 4: Spending, Income and
GDP
09/05-09/07
3
09/10-09/14
09/10 Add/Drop deadline
Chapter 5: Inflation and the Price
Level
4
09/17-09/21
Chapter 6: Wages and
Unemployment
5
09/24-09/28
Chapter 7: Economic Growth
6
10/01-10/05
Chapter 8: Saving Capital Formation
and Financial Markets
10/03: Midterm 1
7
10/8-10/12
Chapter 8: Saving Capital Formation
and Financial Markets
8
10/15-10/19
Chapter 9: The Financial System,
Money and Prices
9
10/22-10/26
Chapter 10: Short term Fluctuations
10
10/29-11/02
Chapter 13: Aggregate Demand and
Aggregate Supply
10/29: Last day to withdraw
11/02: Midterm 2
11
11/05-11/09
Chapter 13: Aggregate Demand and
Aggregate Supply
12
11/12-11/16
Chapter 14: Macroeconomic Policy
13
11/19-11/23: Thanksgiving break
14
11/26-11/30
Chapter 15 and 16: The
international economy, if time left.
15
12/03-12/05
16
FINAL EXAM: 8:00 – 10:15 am
Chapter 15: The international
economy, if time left.
Monday, December 10
Williams 301
~ GRADES~
A: Score superior to 90%
B: Score between 80 and 90%
C: Score between 70 and 80%
D: Score between 60 and 70%
F: Score below 60%
~ ON-LINE ARTICLES~
Articles are used all along the semester to illustrate the principles, concepts and topics studied
in class. Examples of those articles are as follows.
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“Sources of the Budget Deficit”, Krugman, P., The NYTimes, July 2012.
This article illustrates the concept of budget deficit by analyzing the discrepancies
between forecasts and actual deficits in the US.
“The productivity gap between Europe and the US: Trends and causes”. Van Ark, B.
O’Mahony, M. and Timmer, M.P., Journal of Economic Perspectives, 2008.
This article illustrates the concept of productivity by discussing the most recent trends in
European and US productivity.
The Fed’s balance sheet, The Wall Street Journal, 2011.
This article illustrates recent fundamental changes in the US monetary policy.
Draghi Strikes back II, The Economist, Feb 2012.
This article discusses the role of monetary policy in dealing with the crisis in Europe.
~ POLICIES~
You need to be aware of UVM policies by reading the UVM Rights and Responsibilities of
Undergraduate. I also have a few specific guidelines. You can always talk to me if you have any
questions or concerns .
Absences:
- For unexpected absences on test days, accepted excuses with adequate written
documentation are: Dean’s office excuse, unplanned athletic competition.
- If a student is not present at the date and time of a test without an accepted excuse, he/she
gets a grade of zero.
Tardiness:
- If the day of a test a student comes late while one of his/her classmates has already
completed the test and left the classroom, the late student will not be authorized to take the
exam and gets a grade of zero.
- Students should arrive prepared for class and on time, and remain in class until the class is
dismissed.
Important:
- If you have a religious, athletic, planned medical conflict, or disability, do not forget to provide
me with the university documents within the specified deadlines (see UVM policy).
- To ensure the quality of discussions in class, everyone in the classroom needs to act in a
respectful way. Students who feel like participating in the discussion need to raise their hand
and wait for permission to talk. Students should not interrupt each other.
- I expect students to focus, participate and take notes during class.