Economics 100: Introduction to Macroeconomics Spring 2012, Tuesdays and Thursdays Kenyon 134
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1 Economics 100: Introduction to Macroeconomics Spring 2012, Tuesdays and Thursdays Kenyon 134 Instructor: Sarah Pearlman Office: Blodgett 134A Office Hours: Tues & Wed 4:45-5:45pm and by appointment Overview Welcome to Introduction to Macroeconomics. This course is designed to give you a basic understanding of essential concepts and questions in the field of macroeconomics. Our focus will be on the three fundamental concerns of macroeconomics: inflation, unemployment and output growth. We will talk about how each is measured and discuss theories about their determination. Attention will be paid to the role of government in the macroeconomy, specifically theories and debates about the ability of fiscal and monetary policy to achieve the goals of low unemployment, low inflation and high output growth. Finally, we will talk about the international sector and its relevance to the macroeconomy. Overall students should learn the key concerns in macroeconomics and an appreciation for the ways in which economists address these concerns. Textbooks/Readings The main text for this course is the 10 th edition of Essentials of Macroeconomics by Karl Case, Ray Fair and Sharon Oster. I will also hand out some supplementary readings to accompany problem sets and guide class discussion. These are designed to reinforce the relevance of the material from class and give you a chance to apply concepts to real world examples. Requirements: To be as fair and impartial as possible I base grades on students knowledge and understanding of the material as demonstrated in problem sets, class participation, and exams. There will be no opportunities for extra credit. If at any point during the semester you face circumstances which prevent you from attending lecture and completing problem sets and/or exams on time and to the best of your ability, please contact me as soon as possible. Contacting me about difficulties after the course is completed is unhelpful, as there is little that can be done after the fact. Breakdown of the Final Grade is as follows (out of 500 total points): Problem Sets 24% Class Participation 8% 1 st Midterm 20% 2 nd Midterm 20% Final Exam 28% You are accountable for material presented in class. I encourage to you get to know someone else in the class, so that if you are unable to attend one or several lectures you can copy the notes. My notes will not be made available. 1
2 Problem Sets There will be seven problem sets during the semester. The problem sets are designed for you to work through the material yourselves and gain a better understanding of the concepts presented in lecture. I view this as an important part of the learning process and thus the problem sets, combined, will account for 24% of the total grade. You will be allowed to drop the lowest problem set grade. Problem sets will be handed back with solutions the class after you turn them in. I will not accept late problem sets. If you cannot make it to class to turn in your problem set please it to me or leave it under the door of my office. If you do not leave it these locations, there is a good chance I will not find it. I encourage you to work together on the problem sets, but each student must turn in individual work. Problem sets are graded on accuracy as well as on effort. Answers that are vague, difficult to read or appear incomplete will not receive full credit. With regard to questions, I encourage to seek help if you are confused or want further clarification. I do, however, want this to happen in office hours or over rather than during class, as many questions are individual specific and are better addressed one-on-one. Class Participation 1) Policy Discussion To encourage active participation and to integrate current policy issues into the course, we will hold 6 discussions during the semester. The general discussion topics are: 1. Fiscal Policy- Effectiveness 2. Fiscal Policy- Debt 3. Monetary Policy 4. Deflation 5. Economic growth Each discussion will consist of two teams of 3-4 students each. Each team has 10 minutes to present the information outlined in the reading I will assign. You will be graded not just on your delivery in class, but also on your fellow student s understanding of the material you present. Each team will submit an exam question to me based on their material, which will be used to assess how well other students understood the material. This means you are responsible for understanding all of the discussion topics, not just the one you present. 2) Reading for class Occasionally I will assign a short reading for class. The purpose of this is to allow for greater discussion of particular topics. The expectations and structure of these exercises will be clearly outlined in advance. Exams The will be two midterms and a final exam. Each midterm accounts for 20% of the final grade and the final accounts for 28% of the final grade. Questions designed by each discussion team will form part of the exams. 2
3 Make-up Exams A student will be eligible to take a make-up exam only if (1)the student is absent from the original exam because of one of the legitimate causes listed in the Undergraduate Catalog and (2) furnishes documentary support for the assertion that the absence resulted from one the these causes. When a make-up exam is warranted, the student is to notify me without any delay. If a student also misses the make-up exam, then the weight that would have been given to that exam will be assigned to the weight used for that student s final exam. If you fail to take one of the exams and are not eligible for a make-up exam, you will receive a zero score. You cannot choose to have the other exam weighted more heavily in order to adjust for the missed exam. Academic Support "Academic accommodations are available for students with disabilities who are registered with the Office of Disability and Support Services. Students in need of disability accommodations should schedule an appointment with me early in the semester to discuss any accommodations for this course that have been approved by Office of Disability and Support Services, as indicated in your DSS accommodation letter." 3
4 Course Outline 1. Introduction to Economics Dates Topic Reading 1/19 Basic Concepts in Economics Case & Fair Chapter 1, 2 & Appendix 1/24 Demand, Supply and Market Equilibrium PROBLEM SET 1 handed out 2.Concepts and Problems in Macroeconomics 1/26 Major Themes: Macroeconomic Stability 1/31 Measuring National Output PROBLEM SET 1 due PROBLEM SET 2 handed out Case & Fair Chapters 3 &4 Case & Fair Ch. 5 Case & Fair Ch. 6 2/2 Measuring Inflation Case & Fair Ch. 7 2/7 Measuring Productivity and Unemployment 3. The Goods & Money Markets 2/9 The Goods Market: Aggregate Expenditure and Equilibrium Output PROBLEM SET 2 due PROBLEM SET 3 handed out 2/14 The Government and Equilibrium in the Goods Market Case & Fair Ch. 7 Case & Fair Ch. 8 Case & Fair Ch. 9 2/16 Fiscal Policy and Deficits Case & Fair Ch. 9 2/20 PROBLEM SET 3 due by noon 2/21 The Money Supply: What is Money? PROBLEM SET 3 due PROBLEM SET 4 handed out Case & Fair Ch.10 2/23 MIDTERM 2/28 How Banks Create Money Case & Fair Ch. 10 3/1 How Banks Create Money Goldsmiths 3/6-15 SPRING BREAK 4
5 3/20 The Federal Reserve System In class questions about the structure of the Federal Reserve 3/22 Equilibrium in the Money Market: Money Demand and Interest Rate 4. Macroeconomic Analysis 3/27 Links between the Goods and Money Markets. Aggregate Demand PROBLEM SET 4 due PROBLEM SET 5 handed out Case & Fair Ch. 10 Ben Bernanke Case & Fair Ch. 11 Case& Fair Ch. 12 3/29-4/3 Aggregate Supply Case& Fair Ch. 13 4/5 Labor Markets and Unemployment Case & Fair Ch. 14 Raghuram Rajan Demand or Supply? Project Syndicate 4/10 Fiscal Policy Discussions PROBEM SET 5 due PROBLEM SET 6 handed out 4/12 Monetary Policy and Deflation Discussions 4/17 2 nd MIDTERM 4/19 Long Run Growth Case & Fair Ch.17 Ken Rogoff Rethinking the Growth Imperative Project Syndicate 4/24 Growth Discussion 5. The World Economy 4/26 International PROBLEM SET 6 due PROBLEM SET 7 handed out Case & Fair Ch.20 5/1 Last Class: International Case & Fair Ch.20 5/2 PROBLEM SET 7 due TBA FINAL EXAM 5
6 General Summary of Problem Sets Problem Set 1: Intro Material Problem Set 2: Measurement issues and intro Macro concepts Problem Set 3: Aggregate Expenditure and Fiscal Policy: Goods Market Problem Set 4: Money Markets, Money Demand and the Fed Problem Set 5: Aggregate Demand and Supply Problem Set 6: Inflation, Unemployment and Growth Problem Set 7: International Sector 6
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