Download Last updated January 13, 2012 Department of Economics

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January 13, 2012
UNIVERSITY OF VERMONT
Department of Economics
EC 11 Principles of Macroeconomics
Rowell 103
Spring 2012
Office hours: MW, 9-10
Professor Stephanie Seguino
Phone: 656-0187
Office: Old Mill 340
Email: [email protected]
Undergraduate Teaching Assistant: Erin White
Email: [email protected]
Syllabus
Course Objectives
Macroeconomists study the operation of the entire economy. This contrasts with the focus of
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 federal deficits and debt
 Debate over tax policy
 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
Because material is presented in a building block fashion, attendance and reading of assigned materials
are important in this class. I strongly recommend that students read the assigned readings BEFORE
coming to class. Students are encouraged to ask questions and participate in classroom discussions and
tutorials. I will be forming groups at the beginning of the semester for you to work in on your own and
for specific assignments. The groups will be posted on Blackboard (bb.uvm.edu).
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Blackboard [BB] is an important tool in this course, along with lectures and tutorials. I will pose exercises
as well as critical thinking questions that serve as review guides for your exams. I strongly encourage you
to do these exercises after each chapter to test your understanding. Some assignments will be turned in.
I would appreciate it if you observe my office hours (see above). If this is not convenient, you may set up
an appointment for an alternative time on MWF (please send advance notice for this). My undergraduate
teaching assistant (UTA), Erin White, and I are available to help you in understanding the technical and
other material of this course. Tutorial/review sessions will be arranged on a periodic basis and they are
important supplements to the course. The UTA will go over the exercises and assignments, give a review
for exams as well as entertain questions on the technical part of the course materials. The tutorial
schedule will be posted on the BB once the meeting times and classroom arrangements are determined.
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. In addition to the typical violations of integrity you are already
aware of (e.g., plagiarism, information sharing during exams), note that i-Clicker misuse (e.g. registering
someone else’s attendance in their absence with their i-Clicker) also violates academic integrity with
ramifications for both the absent student and the student acting on their behalf.
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 i-CLICKERS
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. Goodwin, N., J. Nelson, & J. Harrison. (2009). Macroeconomics in Context. M.E. Sharpe.
2. Frank, R. (1999). Luxury Fever. The Free Press.
3. Reich, R. (2010). After-Shock. Alfred A. Knopf or Vintage Press (paperback).
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4. i-Clicker, available at the bookstore. (If you purchase a used i-Clicker from another student, be sure to
go in and change the registration to your name before using in class at http://www.iclicker.com/).
COURSE REQUIREMENTS
Your final course grade is based on:
Three exams
Class assignments and attendance
Reaction paper
‘Social Classroom’ Learning Project
1.
60%
15%
10%
15%
Exams
There will be three short exams (20% each).
First exam
Second exam
Final exam (comprehensive, 10:30-1:15pm)
February 24
March 28
May 4
Please make your travel plans accordingly. 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, you must see me at least one week in advance of the exam to
make arrangements
2.
Assignments and attendance (15%)
There will be 1-2 written assignments prior to each exam. These are practice exercises and are meant
to help you understand the concepts, tools and their applications, provide practice problem solving
and help prepare you for the exams. Some involve questions at the end of the chapter and others will
require problem-solving or economic analysis of data obtained from government or international
institution, e.g., World Bank and UNDP websites. Solutions will be discussed during the tutorial
sessions. Impromptu in-class writing and problem-solving assignments may be used to assess your
individual preparation or your understanding of class material. Some of these assignments will be
collected and graded; others will be spot-checked and you will earn points based on whether or not
you completed the task. There are no make-ups on these in-class assignments. These assignments,
together with attendance, constitute 15% of your grade.
Late submissions: Please note that each assignment will have 2 points (out of 10) lowered for each
day past beyond the due date (during class period).
The material in this course is presented in building-block fashion. 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
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EVERY LECTURE.
3. Reaction paper (10%)
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 January and April 2011). Alternatively, you
may consult any of the blogs below for an article of interest.
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/
Due date (in class, no exceptions): April 11
A reaction paper should be an informed analysis and commentary of either a newspaper article or
blog entry. It consists of four parts:
1. A brief summary (one or two paragraphs only) of the salient points of the article. [NOTE: the news
article should be attached to your paper].
2. Clear definition of the macroeconomic issue(s) in your own words. Explain the issue(s) being
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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 Reich or Frank 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). You should attach a copy of the news article with your paper. Late
papers submitted beyond the class period of the due date will have the grade lowered by 10% 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 economic 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%).
4. ‘Social Classroom’ Learning Project (15%)
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 sample and conduct interviews to learn more about a
particular economic issue or problem discussed in class, or a particular product/service in the
Burlington community or neighborhood. For example, you can examine the factors that affect
supply and demand, job opportunities, student loans, firm behavior regarding hiring and
firing during economic downturns. (A description of your survey design, sample selection
method and list of interview questions must be provided in the appendix). Topics should be
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related to macroeconomics. Please note that there are guidelines on ethics and confidentiality
that you need to follow.
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. You must 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.
LOGISTICS AND REPORT DUE DATE
You will organize the entire project and work out the logistics among 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 page maximum for individual reports; 6 page maximum
for two-person report) on day of final exam in class, May 4. No extensions will be given.
The report should consist of:
1) cover page,
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.
A good project must incorporate sound economic reasoning and the application of any tools
learned in class. Your papers should be informative, thoughtful, and reflect your curiosity on a
particular economic topic, as well as your resourcefulness and creativity. 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?
 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:
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1) relevance and ability to connect the project with concepts and tools learned in class
(20%),
2) the rigor of your economic reasoning and analysis (40%),
3) creativity and resourcefulness (30%),
4) writing skill, appearance (spelling, etc.) and adherence to guidelines of structure
(10%).
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.
Please note there will be no classes on February 8 or April 23. Make-up classes are scheduled for
Friday, February , 4-5pm and Friday, April 27, 4-5pm. Attendance is required. Both make-up classes
will be held in 301 Williams.
I. INTRODUCTION
WEEK 1 (January 18-20) Introduction to the course
Required readings:
 Goodwin, et al., Chapters 1 and 2.
 Frank, Chapters 1-5.
WEEK 2 (January 23-27) Economic Tools and the Workings of an Economy
Required readings:
 Goodwin, et al, Chapter 3.
 Krugman, P. “The Death of Horatio Alger.” [BB]
Assignment 1 on PPF handed out. Due in class on February 3.
WEEK 3 (January 30-February 6) Evolution of Economic Thought: Contributions of Adam
Smith and Ricardo, Supply and Demand
Required readings:
 Goodwin, et al, Chapter 1, pp. 14-19 (overview) and Chapter 4.
 Adam Smith, The Wealth of Nations, Volume I, Chapters I.1 and I.2
(http://www.econlib.org/library/Smith/smWN.html)
Note: February 6 teams formed to work on Assignment 2.
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Assignment 2 on supply and demand handed out. Due February 15.
WEEK 4 (February 10) Evolution of Economic Thought: Karl Marx
No class February 8. Make-up class Friday, February 10, 4-5pm.
Required reading
 Miller, J. “Coming Clean on Class Conflict.” [BB]
Week 5 (February 13 – 17) Say’s Law, and the Rise of Neoclassical Economics
Required reading:
 Frank, remainder of book.
Week 6 (February 20 -22) Macroeconomic measurement: Current approach
Exam on February 24
Required reading:
 Goodwin, et al, Chapter 5.
Assignment 3 handed out. Due March 2 in class.
Week 7 (February 27 – 29) Macroeconomic measurement: Environmental and Social
Dimensions
Required reading:
 Goodwin, et al, Chapter 6.
Week 8 (March 2-14) The Great Depression and the Keynesian Revolution
Required reading:
 Goodwin, et al, Chapter 7.
 Reich, R., Chapters 1-3.
Week 9 (March 16-23) Aggregate Demand and Economic Fluctuation
Required reading:
 Goodwin, et al, Chapter 8.
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Submission of SCLP topic and plan (one paragraph) due March 23, Friday.
Week 10 (March 28-30) Fiscal Policy
Exam March 26
Required reading:
 Goodwin, et al, Chapter 10.

Reich, R., Chapter 6: “The Great Prosperity: 1947-75.”
Week 11 (April 2-6) Money and Monetary Policy
Required reading:
• Goodwin, et al, Chapters 11 and 12.
Week 12 (April 9-13) Monetarism, Supply-Side Economics, and the Debate over Debts,
Deficits, and Taxes.
Required reading:
 Goodwin, et al, pp. 247-249.

Koechlin, T. “ The Wrong Deficit.” [BB].

Krugman, P. “The Tax Cut Con.” [BB].
Reaction paper due in class April 11.
Assignment 4 handed out. Due April 18.
Week 13 (April 16-20) Are There Macroeconomic Implications of Growing Income
Inequality?
Required reading:
 Goodwin, et al, Chapter 3, Section 3.
 Reich, R., Chapter 4: “How Concentrated Income at the Top Hurts the Economy.”
Week 14 (April 25-27) The Financial Crisis
No class April 23, make-up class April 27, 4-5pm.
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Required reading:
 Handout on Minsky and Kindelberger.
 Reich, R., Chapters 7-8. 4:
Week 15 (April 30-May 2) Macroeconomic Challenges of the Twenty-First Century
Required reading:
 Goodwin, et al, Chapter 15.
 Reich, Chapters 7-8, all of Part III. [Part II is optional but a good read].
Social Classroom Learning Project due May 4 at the time of the final exam.
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Summary of due dates
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Assignment 1, February 3
Assignment 2, February 15.
Exam 1, February 24
Assignment 3, March 2.
SCLP project description and plan, March 23
Exam 2, March 26.
Reaction paper, April 11.
Assignment 4, April 18.
Final exam: May 4, 10:30am, 103 Rowell.
SCLP project, May 4.
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