Makroökonomie I (Macroeconomics I)

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1 Johann Wolfgang Goethe-Universität Fachbereich Wirtschaftswissenschaften Bachelor of Science Programm Professor Michael Binder, Ph.D. / Jan Mutl, Ph.D. Sommersemester 2007 Syllabus Version April 18 th, 2007 Makroökonomie I (Macroeconomics I) European Credit Transfer System: The course carries 12 credit points according to the European Credit Transfer System. Course Language: While the language of instruction for the course will be English, course participants may satisfy the course requirements in German language as well. Class Time and Location: Lectures and Discussion Sections: Tuesday, 10:15 am 11:45 am and 12:30 pm 2:00 pm, Room: H IV (weekly). Wednesday, 12:15 pm 1:45 pm, Room: H IV (weekly). There will be no strict separation between lectures and discussion sections. Tutorials: Group 1 and 5: Wednesday, 2:15 pm 3:45 pm, Room: H 1 (bi-weekly). Group 2 and 6: Wednesday, 2:15 pm 3:45 pm, Room: H 5 (bi-weekly). Group 3 and 7: Wednesday, 4:15 pm 5:45 pm, Room: H 9 (bi-weekly). Group 4 and 8: Wednesday, 4:15 pm 5:45 pm, Room: NM 126 (bi-weekly). You will need to register for the tutorials by sending an by 5:00 pm on Monday, April 23, to Fedor Ruhose at ruhose@wiwi.uni-frankfurt.de. Make sure to include in your your first name, last name, student ID number and telephone number. If you have a conflict of schedule with another course in the Bachelor of Science Programm at Goethe-Universität, provide the details of this conflict of schedule in your registration as well. You will be informed about the tutorial group to which you have been assigned by Wednesday, April 25. Groups 1 through 4 will meet bi-weekly from May 2 onwards, and Groups 5 through 8 will meet bi-weekly from May 9 onwards. Note that attending the tutorials is mandatory. As detailed below, the grade for the tutorials will be based on one oral presentation of the solution of part of a problem set as well as written solutions to two problem sets. Tutors in all tutorials will randomly call on students to give their oral presentation of the solution of part of a problem set. Students who fail to attend a 1

2 tutorial in which they are called upon to give an oral presentation will not be granted an opportunity to give this oral presentation during another tutorial. Course Description: The primary purpose of this course is to give you a sound grounding in macroeconomic theory, developing a framework to analyse the two issues at the core of macroeconomic analysis: economic growth and business cycles. This framework will in turn allow us to analyze macroeconomic policy questions. You will probably occasionally find the models that we will study in this course to be a little abstract, forcing you to think through, and sometimes also reconsider, economic mechanisms that you may have taken for granted in the past. While the level of mathematical techniques to be used in this course will be elementary (rarely going beyond simple algebraic manipulations), what will be demanding in this course will be its emphasis on conciseness. It will be critical that in your own studies you will not fall behind the pace of the classes. You are expected to thoroughly work through the assigned readings, to do all the problem sets with diligence and on time, and to actively participate in the tutorials. Course Website: The course website will contain further updates of this syllabus, a listing of the tutors and their office hours, course news/administrative announcements, lecture and discussion section notes, problem sets as well as additional material for the lectures, discussion sections and tutorials. We encourage you to check the website regularly. Some material on the website will be password protected. The password will be announced in class, and must not be passed on to anybody not attending the course this semester. Course Requirements: Your grade for this course will be based on your participation in the tutorials (20%) and on a final examination (80%). The grade for the tutorials will be based on one oral presentation of the solution of part of a problem set and written solutions to two other problem sets. The date of the final examination has been set by the Examination Office as follows: Friday, July 27. You will need to register for the final examination following the procedure set out by the Examination Office. Do not register for this course if you have scheduling conflicts regarding the final examination. For any questions concerning the registration for the final examination do contact the Examination Office directly: pruefungsamt@wiwi.uni-frankfurt.de. 2

3 Course Logistics: First Class: Tuesday, April 17 th, The administrative affairs for the course including coordination of the tutorials will be handled by Jan Mutl, Ph.D., Office Hours (Class Period): Michael Binder, Tuesday, 8:00 am 9:30 pm (115 B), 11:45 am 12:30 pm (H IV) and 2:00 pm 3:00 pm (115 B). Jan Mutl, Wednesday, 3:30 pm 4:30 pm (138 B). The tutors and their office hours will be announced separately. Texts: The textbook for the course is: DeLong, J.B. and M.L. Olney (2006): Macroeconomics, Second Edition, London: McGraw- Hill (ISBN for Soft Back Edition: ). We recommend that you consider purchasing the textbook. The textbook will also be available from the Lehrbuchsammlung der Universitätsbibliothek. Some of the course material draws on the following book that contains quite extensive coverage of empirical issues: Miles, D. and A. Scott (2004): Macroeconomics and the Global Environment, Second Edition, Chichester: John Wiley & Sons (ISBN for Soft Back Edition: ). A word of caution regarding the course website: Do not view the material on the course website as a substitute for attending classes. The lectures, discussion sections and tutorials will involve material that will not be posted on the course website. Also, the lecture and discussion section notes are not meant for self study, but rather are distributed to make it easier to follow the lectures and discussion sections. 3

4 Course Outline: Please note: To preserve some flexibility regarding the time to be spent on the various topics to be covered in this course, the dates given below indicating when each topic will be covered in the lectures and discussion sections should be taken as approximations only. Additional readings may be assigned on occasions. If these readings cannot be made available for downloading from the course website, then they will be placed on reserve at the Fachbereichsbibliothek. I. Introduction 1. Why Study Macroeconomics? 2. Macroeconomics as a Science DeLong and Olney, Chapters 1 and 3. Miles and Scott, Chapter 1. April 17. II. Key Macroeconomic Variables and the National Income and Product Accounts 1. Exchange Rates 2. Prices and Inflation 3. Equities and Bonds 4. Unemployment 5. Gross Domestic Product (Product, Income und Expenditure Approach, Interpretation of Gross Domestic Product as Measuring National Welfare) DeLong and Olney, Chapter 2. Miles and Scott, Chapter 2. April 17 to April 25. 4

5 III. Long-Run Economic Growth 1. The Solow Growth Model (Balanced Growth Path and its Determinants; Optimal Rate of Saving) 2. The Reality of Economic Growth vs. the Solow Growth Model DeLong and Olney, Chapters 4 and 5. Miles and Scott, Chapters 3 to 6. May 2 to May 9. IV. Flexible-Price Macroeconomics 1. Determining Aggregate Supply 2. Determining Aggregate Demand a. Consumption b. Investment c. Government Expenditure d. Net Exports 3. Aggregate Equilibrium 4. Effects of Supply- and Demand Shocks on Aggregate Equilibrium 5. Money Supply, Money Demand and the Effects of Changes in Monetary Policy DeLong and Olney, Chapters 6 to 8. Miles and Scott, Chapters 3 and 11 to 13. May 15 to May 30. V. Sticky-Price Macroeconomics 1. Business Cycles 2. Price and Wage Rigidity 3. Multiplier Effects 4. The IS-LM Model a. Exogenous Interest Rate b. Exogenous Money Supply DeLong and Olney, Chapters 9 to 11. Miles and Scott, Chapters 7 and 14. May 29 to June 20. 5

6 VI. Macroeconomics with Limited Price Adjustment 1. The Taylor Rule and the AS-AD Model 2. The Phillips Curve 3. Expectations Formation (Static, Adaptive and Rational Expectations) DeLong and Olney, Chapter 12. Miles and Scott, Chapter 7. June 19 to July 4. VII. Macroeconomic Policy 1. Rules vs. Authorities in Monetary Policy 2. Fiscal Policy and National Debt a. The Budget Constraint and Ricardian Equivalence b. Debt Dynamics c. Long-Run Effects of Budget Deficits 3. Exchange Rate Regimes and International Economic Policy DeLong and Olney, Chapters 14, 15 and 17. Miles and Scott, Chapters 10, 15, 16 and 19 to 21. July 3 to July 18. 6

Livermore Valley Joint Unified School District. B or better in Algebra I, or consent of instructor

Livermore Valley Joint Unified School District DRAFT Course Title: AP Macroeconomics Grade Level(s) 11-12 Length of Course: Credit: Prerequisite: One semester or equivalent term 5 units B or better in