Download Intermediate Macroeconomics

Last updated July 6, 2015
Intermediate Macroeconomics
EC 171, Fall 2015
Tuesdays and Thursdays, 425 – 540 pm
Rowell 118
Professor Stephanie Seguino
Telephone: 802.656.0187
Office: Old Mill 340
Website: www.uvm.edu/~sseguino
Office hours: T and Th, 245 - 400 pm
Note

For a variety of reasons, email is not efficient for communication. See me during office
hours instead.
 Make-up exams will be allowed only under extreme circumstances, such as illness. In order
to schedule a make-up exam you must notify me prior to the exam (this is the only case
where email communication should be used) and provide a written note from your doctor.
 Please turn off cell phones and computers before class begins.
 The dates of the midterm and final exam dates are written in stone, but I may choose to alter
the chapter assignments (or omit chapters entirely) depending upon how long it takes to
cover essential material. Changes to the syllabus (if any) will be posted on Blackboard. Check
the header for the date on which the syllabus was revised to make sure you have the most
recent version.
_____________________________________________________________________________
Course Description
This class explores the theoretical background for understanding macroeconomic problems and policy options.
Topics include the IS-LM and AS-AD general equilibrium systems, money, unemployment, inflation, and
interest rates. We will be emphasizing the historical context of our tools as well as highlighting real world
applications of them. We will compare and contrast the major macroeconomic theories, including Keynesian,
Classical, New Classical, and Post-Keynesian models.
The use of models to develop an understanding of how macroeconomies work requires algebra and calculus.
The models are used to explore a number of questions about the price level, aggregate output, and
unemployment. What explains recessions? What causes inflation? What are the macroeconomic effects of tax
cuts? Does increased income inequality have macroeconomic effects? Can we raise wages and promote
economic growth? And what was behind the global crisis of 2008? It is assumed that you have a good
understanding of the fundamental concepts of Demand and Supply, Unemployment, Inflation, Gross
Domestic Product, Business Cycles, and Fiscal and Monetary Policy.
_____________________________________________________________________________________
Prerequisites
All students registering for this course must have taken EC 11 and 12 as well as Math 19 (or 21) in order to
have the level of preparedness in economic theory and math required to successfully complete this course. You
must have a valid UVM email account. If you have a private account, you should forward your UVM email to
that account. A number of articles for this class as well as the syllabus will be posted on Blackboard (denoted
BB below).
______________________________________________________________________________________
Required and Optional Textbooks


Blanchard, Olivier and David Johnson. 2012. Macroeconomics (Sixth Edition). ISBN 978-0132078337
(Required)
Findlay, David and Olivier Blanchard. Study Guide and Tutorial for Blanchard. ISBN 978-0132078337
(Optional).
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
Palley, Thomas. 2013. From Financial Crisis to Stagnation: The Destruction of Shared Prosperity and the Role of
Economics. Cambridge University Press. ISBN 978-1107612464. (Required)
The Findlay and Blanchard Study Guide has not been ordered for the bookstore. You will need to find it from
an online bookstore.
_____________________________________________________________________________________
Class Requirements
Students will be evaluated based on their performance in the following categories:
(1) Attendance. Attendance is required. Two absences are allowed (this includes medical absences). Each
absence above that threshold will reduce your final grade by a half a letter grade. Students arriving more
than 5 minutes late to class will be marked as absent.
(2) Homework and quizzes. There will be three homeworks and, from time to time, quizzes. These will be
graded on a simple scale:
Grade
✓+
✓
✓-
0
Points
95
75
50
0
Meaning
Excellent
Average/Good
Sub-par
Fail/Absent
In cases where the work is really exceptional, I’ll award a check-plus-plus, so it’s equivalent to a 100.
(3) Three exams. Two mid-term exams, October 8 and November 12, and a comprehensive final. Please take note and
arrange your travel schedules accordingly. There are no make-up exams except in case of documented
medical emergency. To study for these exams, expect to put in 9-12 hours of work. Final exam is
comprehensive.
(4) Current economic events. Be prepared to participate in class discussions on applications of macro theory
to current economic events. Preparation necessitates reading the newspaper and/or economics blogs
(specific blogs noted below) on current US and global macroeconomic issues, and doing the course
reading in advance. As part of your preparation, you will write bi-weekly commentaries on blog or news
articles (see below for details).
(5) Study Guide. Do questions in the Study Guide on your own as practice and in preparation for exams.
These will help you to understand the material with greater depth and to identify areas on which you need
additional help. You are encouraged to work in groups on these problems. These will not be graded.
These course requirements will be weighted as follows in calculating your final grade:
Current events work:
10%
Homeworks:
10%
Exams (3):
20%, 25%, and 35%, respectively.
______________________________________________________________________________________
Course Grades
Letter grades are assigned on a straight scale:
A is 90-100 percent
B is 80-89 percent
C is 70-79 percent
D is 60-69 percent
F is 59 percent or less
+/- will be assigned at the discretion of the professor.
Student responsibility
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I have tried to give you a good idea of what the course involves and the timetable on which we will work
through the material. I reserve the right to change readings, times, and other aspects of the syllabus as needed,
however. You are responsible for reading your syllabus to keep abreast of the schedule, and staying current on
any other changes to the syllabus, which will be announced in class.
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Tentative Course Schedule
Date
Week 1: September 1-3
(No class on Sept. 3)
Topic
Introduction, Measurement of
Macroeconomic Performance
Reading
Blanchard, Chs. 1-2, and appendices.
Palley, Chs. 1-2.
Calculus review
“Measuring the Economy: A Primer on
GDP and the NIPA.” [BB]
Weeks 2-3: Sept. 8 - 17
Calculus review, continued
Costanza, “Time to leave GDP behind.”
[BB]
Blanchard, Ch. 3.
Week 4: Sept. 22-24
The Short-Run: The Goods Market
Financial Markets
Blanchard, Ch. 4.
Palley, Chs. 3-5.
Weeks 5-6: Sept. 29Oct. 6
October 8
Week 7: Oct. 13-15
The IS-LM Model
Blanchard, Ch. 5.
Exam 1
IS-LM continued
Blanchard, Ch. 6 (including appendix)
Weeks 8-9: Oct. 20-29
The Medium Run: The Labor Market
The Aggregate Supply-Aggregate
Demand Model
Blanchard, Ch. 7.
Week 10: Nov. 3-5
Open Economy Macro
Blanchard, Chs. 18-21.
Palley, Chs. 6-7.
Nov. 10
Weeks 11-12, Nov. 1219
Week 13: Dec. 1-3
Exam 2
Open Economy Macro, continued
The Global Economic Crisis
Blanchard, Ch. 9.
The Long Run: Economic Growth
Bernanke, Ben. “The Crisis and the Policy
Response.”
http://www.federalreserve.gov/newsevents/speech/b
ernanke20090113a.htm
Epstein, Gerald, “Memento, the Meltdown,
and the Mainstream.”
http://triplecrisis.com/memento-the-meltdown-andthe-mainstream/
Blanchard, Chs. 10-13.
Week 14: Dec. 8
Inequality and Economic Growth
Palley, Ch. 8.
Seguino, “Macroeconomics, Human
Development, and Distribution.” [BB]
Onaren, “The role of gender in equality-led
sustainable development.” [BB]
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If time, last week of class
we will cover the following.
Policy Discussion
Blanchard, Chs. 8, 22-24.
Palley, Chs. 9-12.
December
Comprehensive Final Exam:
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Current economic events analysis assignment
As part of integrating theory with real world events, regularly read the New York Times newspaper and
economics blogs. See the list of blogs to choose from, and their websites, below.
Assignment
1.
2.
3.
4.
Select a newspaper article clearly related to macroeconomics. You may on occasion choose to write
an article located in an economics blog from the selection listed below.
Every two weeks, write a one-page reaction to the selected article or blog entry. This should be
typewritten. Clearly identify the source of the article; identify the main argument of the article; and
provide your analytical reaction to it. You may, for example, note the linkages between the issues
discussed in the article and the theoretical material we are covering in class. Or you may compare the
event with economic events in other countries or regions. Or you may offer a critique of how the
author is analyzing a particular issue. (Papers may be single or double spaced, but my advice to you is
to make sure you sufficiently discuss the topic and relate it to the course. So use your judgment but be
thorough).
The article should be clearly connected to our course material. If it is not, choose a different article.
These should be completed by every other Thursday beginning with September 10. You should turn
them in on the dates of each of the three exams this semester. [No late assignments accepted, no
exceptions]. There may be a temptation to wait until the last minute to do these assignments, but do
not give in. Be prepared each Thursday to discuss your article in class if called on. Altogether, you
should have 7 such reaction papers by the end of the semester, due on the following dates:
September 10
September 24
October 8
October 22
November 5
November 19
December 8
The table below indicates how I will grade these assignments. In exceptional cases, a ✓++ will be
awarded, equivalent to a 100.
Grade
✓+
✓
✓-
Points
95
75
50
0
0
Meaning
Excellent
Average/Good
Sub-par
Missing/Missing
the point
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/
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Paul Krugman: http://krugman.blogs.nytimes.com/
Planet Money: http://www.npr.org/blogs/money/
Global Economic Issues
The Daly Blog: http://steadystate.org/learn/blog/
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/
Vox EU: http://www.voxeu.org/
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