Download Last updated August 21, 2012 Department of Economics

Last updated
August 21, 2012
UNIVERSITY OF VERMONT
Department of Economics
EC 11 Principles of Macroeconomics
Fleming 101
Fall 2012
Office hours: T/Th 130-230pm
Professor Stephanie Seguino
Phone: 656-0187
Office: Old Mill 340
Email: [email protected]
Undergraduate Teaching Assistant: Benjamin Lidofsky
Email: [email protected]
Review session times and location: TBA
Syllabus
Course Objectives
Macroeconomists study the operation of the entire economy. This contrasts with microeconomists who focus
on the behavior of individual households and businesses. To better appreciate the workings of the
macroeconomy, this course will begin with a brief historical survey of the evolution of modern economic
institutions and modern macroeconomic thought. We will study the theoretical frameworks that
macroeconomists have developed to explain how contemporary capitalist economies function, and their ideas
on the relationships between key macroeconomic phenomena – unemployment, inflation, economic growth,
and economic relations with other countries.
While our emphasis will be on the US economy, this course also considers the global economy, reflecting the
fact that we live in an increasingly interdependent world. Throughout the course, in addition to exploring the
theories and other tools economists use, we will discuss the applicability of these theories to real world issues
and concerns; hence a critical perspective is also provided on the topics covered in this class.
The economic tools you learn are intended to help you understand current issues such as:
 The causes of and policy responses to high unemployment
 Debates over the role of the state, and federal deficits and debt
 The determinants of economic growth
 The relationship between the economy and the environment
 The source, extent and effect of economic inequality
 The causes of the recent financial crisis.
CLASSROOM RULES, OFFICE HOURS, AND HELPFUL TIPS
Also, a great deal of the material covered in lectures is not taken up in the assigned texts. For these reasons,
class attendance is emphasized. The single most important action you can take to do well in this class is to
ATTEND EVERY LECTURE. I strongly recommend that students read the assigned readings BEFORE coming
to class. To that end, there will be occasions when exercises from Connect, an online tool for gaining practice
in the course material, will need to be completed before the material is discussed in class. Blackboard [BB] is
an important tool in this course, in addition to the lectures, Connect, and study sessions run by Ben Lidofsky.
Students are encouraged to ask questions and participate in classroom discussions and tutorials.
I would appreciate it if you observe my office hours (see above). If this is not doable, you may set up an
appointment for an alternative time on Tuesday or Thursday (please send advance notice for this). My
undergraduate teaching assistant (UTA), Ben Lidofsky, and I are available to help you in understanding the
technical and other material of this course. Ben has scheduled tutorial/review sessions which will be held
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twice a week. They are important supplements to the course. Ben will go over material covered in lectures as
needed, discuss assignments, give a review for exams, and entertain questions on the reaction paper and
social classroom learning project.
Please note that substantive questions related to the course material should be brought to office hours. It is
not possible to deal with them over email.
A note about laptops and cell phones
Cell phones should be turned off once you enter the classroom. Laptops are not permitted to be open during
class. Internet browsing, checking emails, chatting, text messaging, etc. are not allowed.
ACADEMIC INTEGRITY, STUDENT OWNERSHIP, AND RESPONSIBILITY
Standards of academic conduct are set forth in the University’s Code of Academic Integrity. As a registered
student, you are obliged to become familiar with your rights and responsibilities as defined by the Code.
Violations of the academic integrity code will be treated seriously, and disciplinary actions will be taken,
should such violations occur.
I trust that students in this course will follow the Code of Academic Integrity of the University in their exams,
assignments, learning project, and papers. I encourage you to work with your fellow students for review or to
discuss the lectures and assigned materials in class, but what you hand in or present to meet the
requirements of this course must be your OWN work.
TEXTBOOKS and ONLINE ACCESS
All of the below listed books are required reading and will be available for sale at the bookstore. You may also
want to consider purchasing used copies at booksellers such as Amazon.com.
1.
2.
3.
McConnell, C., S. Brue, and S. Flynn. [MBF] (2012). Macroeconomics, 19th Edition. McGraw-Hill and
Irwin.
Connect. This is a web-based program for homeworks and exercises and is required. This will be
packaged with your book if you buy the McConnell, Brue, and Flynn (19 th edition) at the bookstore. If
you already have the textbook, when you log-in to the Connect course for the first time, you will be
prompted for a code, since you won't have one yet. You will be able to purchase access right there at
the site. Also, the bookstore has been asked to stock Connect cards separately, ISBN 9780077337797.
Reich, Robert. (2010) After-shock. Alfred A. Knopf or Vintage Press.
COURSE REQUIREMENTS
Your final course grade is based on:
Two mid-term exams, 20% each
Final exam
Reaction paper
Social Classroom Learning Project
Connect assignments
1.
40%
25%
10%
15%
10%
Exams
First exam
October 2
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Second exam
Final exam (comprehensive)
November 1
December 14, 1030 – noon.
Please make your travel plans accordingly. Please understand that the large class size reduces flexibility
in responding to individual situations. There will be no make-up exams except in case of medical
emergency, which requires a medical note from one’s doctor AND advance notice (before the exam
begins). Make-up exams are more difficult and longer than the regular exam. If you have received
permission for exam accommodations from ACCESS, you must see me at least one week in advance of the
exam to make arrangements. There are no waivers for debate, athletics, or other factors other than
health.
2.
Reaction paper
Due date: Noon, November 11 (uploaded into BB).
Each student will write a short reaction paper on a relevant macroeconomics-related news article from
the Financial Times, New York Times, the Washington Post, the Economist, and/or Wall Street Journal (the
article MUST have been published between September and November 2012). Alternatively, you may
consult any of the blogs below for an article of interest. I would advise you to scroll through this list of
blogs, find one you like, and read it every day to keep abreast of important macroeconomic news. It is a
way to apply what you are learning in class.
Economics Blogs
US Economic Issues (and some Europe)
Economix: http://economix.blogs.nytimes.com/
Economist’s View: http://economistsview.typepad.com/
Economists’ Forum: http://blogs.ft.com/economistsforum/#axzz1U6P9jYef
Nancy Folbre: http://economix.blogs.nytimes.com/author/nancy-folbre/
Jamie Galbraith: http://utip.gov.utexas.edu/JG/Comments%20and%20Interviews.html
Grasping Reality with Both Hands: http://delong.typepad.com/
Greg Mankiw's Blog: http://gregmankiw.blogspot.com/
Paul Krugman: http://krugman.blogs.nytimes.com/
Planet Money: http://www.npr.org/blogs/money/
Global Economic Issues
Dani Rodrik: http://rodrik.typepad.com/
The Guardian: http://www.guardian.co.uk/commentisfree/america
IMFdirect: http://blog-imfdirect.imf.org/
Naked Keynesianism: http://nakedkeynesianism.blogspot.com/
New Deal 2.0: http://www.newdeal20.org/
Real World Economics Review Blog: http://rwer.wordpress.com/
Triple Crisis Blog: http://www.triplecrisis.com/
A reaction paper should be an informed analysis and commentary of either a newspaper article or blog
entry. It consists of four parts:
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1. A brief summary (one or two paragraphs only) of the salient points of the article. [NOTE: a link to the
new article should be included in a footnote in your paper].
2. Clear definition of the macroeconomic issue(s) in your own words. Explain the issue(s) being
addressed using the economic tools/concepts you have learned in class and discussed in the required
readings. You are encouraged to relate your article to any of the issues discussed in Robert Reich’s book
and to conduct additional research on the issue. If you do the latter, you must cite your references. For a
guideline on how to cite references and the format for a bibliography, see
http://www.feministeconomics.org/pages/author-instructions/style-guidelines/. At that webpage, scroll
down to the section on References for guidance on in-text citation and your bibliography. [Please do NOT
use Wikipedia as a source]. Use data you have collected or graphs to illustrate your points, if relevant.
3. Provide a policy recommendation or solution to the problem (which may be similar or different from
the author’s view) and
4. Explain the expected outcome (using economic theory or reasoning) of your policy recommendation.
The paper should be typewritten, double-spaced with a maximum length of 3 pages in 12-inch font (not
including the bibliography). Late papers submitted beyond the class period of the due date will have the
grade lowered by 25% for each day (or fraction thereof) beyond the due date it is not turned in. Make sure
that proper citation of all references (including data, statistics, etc.) is made in a separate reference section
of your paper (this is an extra page) as this will be part of the grading.
The paper will be graded based on:
a. your ability to integrate macroeconomic concepts/tools and class reading materials into
your analysis of the issue(s) (40%);
b. the clarity and logic of the analysis of the economic problem and corresponding
recommendation (30%);
c. organization and adherence to the guidelines of the paper, including citation of references
(20%); and
d. writing skill and general appearance of the paper (spelling, etc.) (10%).
3. Social Classroom’ Learning Project
Project proposal due date: October 18th, 12 noon. Every student should submit electronically,
even if you are working with another student. Include both names on your submission. You will
receive feedback with suggestions for revision on how to refocus the topic of your paper, if
necessary.
Final paper due date: Day of final exam (December 14). Submit in class in hard copy at the
beginning of the exam period.
This requirement takes you out of the classroom and beyond learning from class lectures and
textbooks. Choose an economic issue, concern, or topic covered in the course and then conduct your
own investigative learning project that involves any one of the following:
1) Design a small survey, choosing a target sample group and size, and then conduct interviews to
learn more about a particular macroeconomic issue or problem discussed in class, or a particular
economic issues facing Burlington or Vermont (again, related to the topic of macroeconomics).
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For example, you can examine the factors that affect supply and demand of jobs; the role of
energy costs or educated workforce in a business’s decision to locate or stay here; the potential
impact of Vermont’s proposed single payer health care system on a) workers, b) students, or c)
businesses; firm behavior regarding hiring and firing during economic downturns; the impact of
Burlington’s living wage ordinance on hiring. Your paper should include a description of your
survey design, sample selection method and list of interview questions in an appendix. Topics
should be related to macroeconomics. Please note that there are guidelines on ethics and
confidentiality that you need to follow. I will post these.
2) Work with/volunteer at a non-profit organization whose work is related to poverty,
employment, economic policy advocacy, welfare, such as a homeless shelter, affordable housing
agency, or soup kitchen) for at least 2 days and describe/reflect on your experience and what
you have learned in class. Provide a description of your work, the nature of organization, and the
number of days work as well as a contact number for the organization in the appendix.
3) Attend two (2) related congressional hearings in Montpelier on an economic issue we covered in
class. To find information on bills and hearings, consult the legislature’s webpage:
http://www.leg.state.vt.us/. A good way for you to identify an issue is for you to contact one of
the legislators that represent Burlington and/or Chittenden County. You should be able to locate
these on the legislature’s webpage.
LOGISTICS AND REPORT DUE DATE
You will organize the entire project and work out the logistics yourselves. You can work individually
or as a team of two (maximum) people. If you are working as a team, be sure to make plans ahead
with your partner and be sure to agree on a fair way of sharing the work.
Your report should describe what you have learned about economic issues/policies and concerns
and policy making in the real world (4-5 pages individual reports (this does not include the cover
page, bibliography, or appendix); 6-8 pages for two-person report) on day of final exam in class,
December 14. No extensions.
The report should consist of:
1) cover page, with a title, your name, and any other pertinent information.
2) a brief description of the main economic issue/policy that you want to examine,
3) background information on the conference, hearing, organization or a description of the
survey or interview methodology,
4) and most importantly, what you have learned from your project - analysis of the
discussions or survey/interview results, your reflection, thoughts and ideas based on
your project experience.
5) Papers should have page numbers, appendices is appropriate, and bibliographies. See
reaction paper guidelines for format of bibliographies.
Your papers should be informative, thoughtful, and reflect your curiosity on a particular economic
topic, as well as your resourcefulness and creativity. A good project will incorporate sound economic
reasoning and the application of tools learned in class. Some questions to reflect upon (depending on
your project):
 What new learning resulted from the survey interviews, hearings, or your volunteer
work environment, that you did not expect? How is the real world different or similar
to what you have learned in class?
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

What do you know now that you wish you had known before you began the project?
What were the most valuable aspects of your experience, academically and personally?
Your grade will be based on:
1) relevance and ability to connect the project with concepts and tools learned in class
(30%),
2) the rigor of your economic reasoning and analysis (40%),
3) creativity and resourcefulness (15%),
4) writing skill, appearance (spelling, etc.) and adherence to guidelines of structure (15%).
COURSE OUTLINE AND READING ASSIGNMENTS
The following is a tentative schedule with the exception of the exam dates, which are fixed. Reading
assignments should be completed by the first day the topic is covered in class. Note the date this syllabus has
been last updated. I will post any revisions to the syllabus to BB.
Please note there will be no class on September 18. A make-up class is scheduled for Wednesday,
September 19th, 530-630pm, in Lafayette 108. Attendance is required.
I. INTRODUCTION
WEEK 1 (Aug. 28 - 30) Introduction to the course
Required reading:
 MBF, Chapter 1.
WEEK 2 (Sept. 4 – 6) Economic Tools and the Workings of an Economy
Required reading:
 Krugman, P. “The Death of Horatio Alger.” [BB]
WEEK 3 (Sept. 11 – 13) Evolution of Economic Thought: Contributions of Adam
Smith and Supply and Demand
Required readings:
 MBF, Chapters 1 - 2.
 Adam Smith, The Wealth of Nations, Volume I, Chapters I.1 and I.2
(http://www.econlib.org/library/Smith/smWN.html)
WEEK 4 (Sept. 19-20) Evolution of Economic Thought: Karl Marx, Say’s Law, and
the Rise of Neoclassical Economics
Note: No class Sept. 18. Make-up class Wednesday, Sept. 19, 535-635 pm, 108 Lafayette.
Required reading
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

Miller, J. “Coming Clean on Class Conflict.” [BB]
MBF, Ch. 9, p. 228.
WEEK 5 (Sept. 25 - 27) Say’s Law, and the Rise of Neoclassical Economics
Required reading
 MBF, Ch. 7.
Exam on October 2
WEEK 6 (Oct. 4) The Great Depression and the Keynesian Revolution


MBF, Chapter 9, pp. 171-78.
Reich, Chapters 1-3.
WEEK 7 (Oct. 9 - 11) Aggregate Demand and Economic Fluctuations

MBF, Chapters 10 - 11.
WEEKS 8 – 9 (16 - 23) Fiscal Policy, and the Debate over Debts, Deficits, and
Taxes.
Submission of SCLP topic and plan (one paragraph) due Oct. 18 (noon).
Required reading:
 MBF, Chapter 13, and Chapter 5, pp. 99 – 111.
 Reich, Chapter 6: “The Great Prosperity: 1947-75.”
 Koechlin, T. “ The Wrong Deficit.” [BB].
 Krugman, P. “The Tax Cut Con.” [BB].
WEEKS 9 – 10 (Oct. 25 - 30) Money and Monetary Policy
Required reading:
 MBF, Chapter 14 (pp. 280 – 290), 15, and 16.
Exam 2 November 1.
WEEL 11 (Nov. 6) Monetary policy, continued
WEEK 12 (Nov. 8 - 13) Monetarism and Supply-Side Economics
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Required reading:
 MBF, Chapter 19, pp. 381-384 and 389-394.
Reaction paper November 11 by noon, submitted to BB dropbox.
WEEK 12, continued (November 15) Are There Macroeconomic Implications
of Growing Income Inequality?
Required reading:
 Reich, Chapter 4: “How Concentrated Income at the Top Hurts the Economy.”
WEEK 13 (November 27 - 29) Economic Growth and Developing Countries
Required reading:
 MBF, Chapter 8 and Chapter 22 (only on the web).
WEEK 14 (Dec. 4) The Current Global Crisis and Other Macroeconomic
Challenges of the Twenty-First Century
Required reading:
 MBF, Chapter 14, pp. 290 – 294.
 Reich, Chapters 7-8, all of Part III. [Part II is optional but a good read].
Note: Review session, December 6, 1 – 230pm, 301 Williams
Social Classroom Learning Project due at the time of the final exam, hard copy:
December 14, 1030am, 101 Fleming
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