Download PRINCIPLES OF MACROECONOMICS

PRINCIPLES OF MACROECONOMICS
Class webpage: https://bb.uvm.edu/
[email protected]
Tel: (802)-656-094
Office: 335, Old Mill
Office Hours: Monday and Wednesday 1:00-2:00
or by appointment.
~ 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
Our first goal 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 first be described with
economic growth. Why are economists interested in economic growth? What are the
determinants of growth? We study the links between economic growth, productivity
and living standards.
Second, we 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.
The international economy
If we cover the material faster than expected and have extra time, we will 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 date. 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 al lectures. Homework and exams are essentially lecture
based. 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 course
outlines and homework material as well as important announcements for the class.
READING
Textbook (mandatory – See “Provisional course schedule”)
Principles of Macroeconomics 4/e by Frank and Bernanke.
Articles (posted on line - See “On-line articles”)
Press articles that illustrate or extend the issues covered in class. The articles are posted on the
web page.
~ PROVISIONAL COURSE SCHEDULE ~
(Chapters from the textbook)
Week
Dates
Reading
1
08/29-09/02
Introduction – A few concepts from
Chapters 1,2 and 3.
2
09/05: Labor day
Chapter 4: Spending, Income and
GDP
09/07-09/09
3
09/12-09/16
Chapter 5: Inflation and the Price
Level
4
09/19-09/23
Chapter 6: Wages and
Unemployment
5
09/26-09/30
Chapter 7: Economic Growth
09/28: Due date homework 1
6
10/03-10/07
10/05: Midterm 1
Chapter 8: Saving Capital Formation
and Financial Markets
7
10/10-10/14
Chapter 8: Saving Capital Formation
and Financial Markets
8
10/17-10/21
Chapter 9: The Financial System,
Money and Prices
9
10/24-10/28
Chapter 10: Short term Fluctuations
10/26: Due date homework 2
10
10/31-11/04
11/02: Midterm 2
Chapter 13: Aggregate Demand and
Aggregate Supply
11
11/07-11/11
Chapter 13: Aggregate Demand and
Aggregate Supply
12
11/14-11/18
Chapter 14: Macroeconomic Policy
13
11/21-11/25: Thanksgiving break
14
11/28-12/02
Chapter 15 and 16: The
international economy, if time left.
15
12/05-12/07
Chapter 15 and 16: The
international economy, if time left.
12/07: Due date Homework 3
FRIDAY Dec 16: 07:30 - 10:15 AM
FINAL EXAM in ROWELL 103
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~ON-LINE ARTICLES~
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Growth figures. The Economist, August 2011.
Time for a double dip? The Economist, August 2011.
How did economists get it so wrong? By Krugman, P. The NYTimes, Sep 2009.
Lessons from 1937. The Economist, June 2009.
Lessons from a “lost decade”. The Economist, Aug 2008.
A cross of rubber. By Krugman, P. The NYTimes, Jan 2011.
Fuels on the Hill. By Krugman, P. The NYTimes, Jun 2008.
Touble with trade. By Krugman, P. The NYTimes, Dec 2008.
Automatic reaction. The Economist, Sep 2010.
The productivity gap between Europe and the US: Trends and causes. By van Ark, B.
O’Mahony, M. and Timmer, M.P., Journal of Economic Perspectives, 2008.
Shift away from thrift. The Economist, Apr 2005.
The great illusion. The Economist, Sep 2004.
Central Banks. The Economist, Feb 2011.
The Fed’s big announcement. The Economist, Nov 4, 2010.
How close is America to a fiscal crisis? The Economist, Feb 2011.
Same as it ever was. The Economist, Jan 2008.
The doctor’s bill. The Economist, Sep 2008.
Recovery Act. Time.com, 2010
Myths of Austerity. By Krugman, P. The NYTimes, Jul 2010.
History of Modern Finance. The Economist, Oct 2008.
The Gold Standard. Notes by Delong, B. U.C. Berkeley and Abdel-Monem, T., University
of Iowa.
We’renot Greece. By Krugman, P. The NYTimes, May 2010.
The Euro Trap, By Krugman, P. The NYTimes, Apr 2010.
~ 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. In case a student is absent for one midterm, this implies that the other
midterm automatically weighs 50% of his/her semester grade.
Tardiness:
- If the day of a test a student comes late on a test day 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.