ECON309 (001): INTERMEDIATE MACROECONOMIC THEORY * SPRING 2015 Dr. Daria Sevastianova, Associate Professor of Economics Office: BE2039 Phone: (812) 465-1677 E-mail: dpsevastia@usi.edu Lecture: MWF 10:00AM 10:50AM, BE1001 Office Hours: MWF 11AM-1PM and by appointment Pre-requisites: ECON208, ECON209, and either MATH215 or 230. Course Materials: MyEconLab with Pearson etext Access Code for Macroeconomics, 8 Ed., Andrew Abel, Ben Bernanke, and Dean Croushore. ISBN-10: 0132993325 ISBN-13: 9780132993326 Economic Data on http://research.stlouisfed.org/fred2/ Course Overview: USI Bulletin: An in depth study in macroeconomic theory. The course will cover traditional macroeconomic topics like short-run fluctuations and stabilization policy, as well as explain other important issues like the determinants of long-run economic growth, the trade balance and financial flows, labor markets, and institutional framework of policymaking. The course will cover traditional macroeconomic topics like short-run fluctuations and stabilization policy, as well as explain other important issues like the determinants of long-run economic growth, the trade balance and financial flows, labor markets, and the institutional framework of policymaking. We will use a variety of examples and analyze macroeconomic data to show how economic concepts can be put to work in explaining real-world issues such as unemployment, productivity growth, challenges of the Social Security and the Federal budget, the impact of globalization on the U.S. economy, and alternative approaches to making monetary policy. We will develop a theoretical framework that encompasses all the macroeconomic analyses presented in the course: long-run and short-run, open economy and closed economy, and classical and Keynesian economics (both schools * Each student is responsible for knowing the contents of the syllabus, understanding, and following the course policies outlined therein. By enrolling in the course, you explicitly consent to the syllabus. 1
of thought will receive a balanced treatment). Lectures on inflation and monetary policy will incorporate the latest work by researchers and the Federal Reserve highlighting interesting new developments and topics in the field, particularly in the aftermath of the recent financial crisis in the U.S. and Europe. We will also frequently draw on international macro policy experience to solidify our grasp of domestic policy and institutions. Quizzes and exams will be based primarily on material covered in the lectures, as well as other assignments. Lecture notes and slides, exam study guides, homework, and other supplementary materials will be posted on Blackboard as the course progresses. College of Business Skill Development: The first objective of the course is to develop the following dimensions of the critical thinking skill identified by the College of Business: - identifying relevant assumptions and understanding the rationale for making them; - organizing thoughts in a logical sequence/constructing a logical argument. The second objective of the course is to develop the following dimensions of the analytical problem solving skill identified by the College of Business: - identifying and applying relevant concepts and information; - correctly calculating mathematical operations; - interpreting results clearly and logically, in a manner consistent with prior analysis. Course Objectives: By the end of the semester, a student with a passing grade should be able to: - identify long run and short run macroeconomic variables and their relationships; - describe a closed and an open model of the economy; - explain key assumptions, outcomes, and predictions of the classical vs. Keynesian framework; - analyze implications of fiscal and monetary policy; - illustrate real-world applications of the macroeconomic concepts learned in class. Grading and Policies: Course Attendance Punctual and consistent attendance will be essential to your success in the course and will directly affect your grade. Most of our classes will be in the form of an open forum in order to foster a constructive exchange of ideas. Therefore, your thoughtful participation is also anticipated and will be a key grade component. It is highly recommended that you communicate with the instructor during her office hours, via e-mail, and ask questions whenever timely clarification is necessary or alternate arrangements need to be made. 2
Communication with Instructor As appropriate for future professionals and according to the College of Business etiquette, the instructor ought to be addressed properly in both written and oral communication with her students ( Professor, Professor Sevastianova, Dr. Sevastianova are all acceptable forms.) Please compose your messages in a professional and respectful manner, as you would treat any work related communications. Furthermore, student correspondence will be handled during business hours of M-F 9AM-5PM. Please allow for a 24-hour window as some responses may necessitate further inquiry. Under certain circumstances, the instructor will communicate with the entire class via the Blackboard mass e-mail option. Assignments and Exams There will be weekly homework posted in advance on Blackboard, five online quizzes scheduled in three week intervals, two midterm exams, and a noncumulative final exam. Review sessions before exams will be held at students request. Homework There will be weekly homework posted early in the week on Blackboard and due by the end of the week, i.e. midnight every Sunday, with the exception of March 15 th, due to Spring Break, April 5 th, due to Easter Break, and February 15 th and March 29 th due to midterm exams. Homework is to be submitted electronically on Blackboard only. You can do so either by typing directly in the window of the homework post, or by attaching a Word document file and/or Excel file whenever necessary. Late, misplaced, or e- mailed submissions will not receive credit. If you are unable to submit on the due date, please submit early to receive full credit. In addition, the lowest homework score will be automatically dropped from the computation of course grades. Homework assignments will primarily take the form of analytical short essay and problem solving. Some homework will be based on lectures and readings, but sometimes you will be asked to locate additional sources of information beyond the scope of lectures and readings. You are free to use the Rice Library resources, various periodicals, and authoritative online sources. Quiz There will be an online quiz every three weeks, for a total of 5 quizzes during the semester. Every quiz will be available on Blackboard for three days, i.e. over the weekend and due by midnight on Sunday. In addition, the lowest quiz score will be automatically dropped from the computation of course grades. The online quiz dates are January 30 th, February 20 th, March 20 th, April 10 th, and April 24 th. 3
Exams The first exam will be administered in class on February 13 th, the second exam will be on March 27 th. The final exam dates are: May 1 st, 9-11AM for Section 001, and May 4 th, 1-3PM for Section 002. Each student is responsible for taking exams with the section in which they are officially enrolled. All cellular phones must be turned off and placed face down on the desk for the entire duration of the exam. Failure to do so will result in automatic dismissal from the exam and a score of zero. Economic Outlook Project This project builds on the economic concepts mastered in class, to analyze the U.S. economic outlook with the help of data available from the St. Louis Federal Reserve website. You will learn to apply knowledge acquired in the course to the analysis of the current state of the economy, and produce a short term forecast based on various economic performance characteristics. The final project is due electronically via SafeAssign on Blackboard by midnight on April 28 th, the last day of class. The required length is 10 pages, not counting the title and reference pages, and any graphs and charts. Standard citations are required, and a match in excess of 50% to other sources will be considered plagiarism. Please also use standard English, a 12 point font, double or 1.5 spacing, and proper margins. Dates and Deadlines Although we all face unexpected circumstances from time to time, every student is expected to observe deadlines and submit all assignments in a timely fashion. Moreover, while the instructor will be happy to clarify missed material during her office hours, it is the student s responsibility to obtain notes from missed class. A missed or late homework/assignment/quiz will earn the score of zero. If you have an excused and documented absence which prevents you from attending class on the date when homework is due, you will have to turn it in early to assure proper credit, along with supporting documentation. No late assignments will be accepted. Make-ups There are no make-ups in this course, i.e. missed examinations may not be made up. In the event you miss an exam, the point value of that exam will be added to your final exam. EXCEPTION: missing a second mid-term exam results in a zero for that exam. You cannot miss the final examination. Grade Appeals Should there arise a grading dispute (particularly over an exam), you are to submit a well-substantiated explanation in writing for the instructor s review. Should there 4
be a simple algebraic miscomputation of your score, it will be corrected immediately. In addition, one lowest homework score and one lowest quiz score will be automatically dropped from your course grade computation. If your exam scores show improvement from one score to the next, the first (lowest) exam score will also be dropped from your course grade computation, thereby adding its weight to the second midterm. This opportunity, however, only applies if you took all three exams. Course Grade Components Various parts of your grade shall be weighted as follows: Participation: 10% Homework: 10% Quiz: 10% Economic Outlook Project: 10% Exam 1: 20% Exam 2: 20% Final Exam: 20% Academic integrity: Academic dishonesty, such as plagiarism and cheating will be subject to disciplinary action as outlined in the USI Bulletin and the University Handbook, and will result in course failure, and possible dismissal from your degree program and the university. Services for students with disabilities can be obtained from the University Counseling Center, OC1022, (812)464-1867. Lecture Topics Outline and Academic Calendar * : January 12-16, 2015: Chapters 1-2 Introduction to Macroeconomic Theory The Measurement and Structure of the National Economy Hw 1 due January 18, 2015 MLK Day January 19, 2015 January 20-23, 2015: Chapter 3 Productivity, Output, and Employment Hw 2 due January 25, 2015 * Provided outline is tentative and is subject to change at the instructor s discretion. You will be notified of any changes in class. 5
January 26-30, 2015: Chapter 4 Consumption, Saving, and Investment Hw 3 and Quiz 1 due February 1, 2015 February 2-6, 2015: Chapter 5 Saving and Investment in the Open Economy Hw 4 due February 8, 2015 February 9-12, 2015: Chapter 6 Long-Run Economic Growth Midterm 1 February 13, 2015 February 16-20, 2015: Chapter 7 The Asset Market, Money, and Prices Hw 5 and Quiz 2 due February 22, 2015 February 23-27, 2015: Chapter 8 Business Cycles Hw 6 due March 1, 2015 March 2-6, 2015: Chapter 9 The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis Hw 7 due March 8, 2015 Spring Break March 9-14, 2015 March 16-20, 2015: Chapter 10 Classical Business Cycle Analysis: Market-Clearing Macroeconomics Hw 8 and Quiz 3 due March 22, 2015 March 23-26, 2015: Chapter 11 Keynesian Theory: The Macroeconomics of Wage and Price Rigidity RCOB Speaker Series: Ben Bernanke March 23, 2015 at 6PM at the PAC Assessment Day March 24, 2015 Midterm 2 March 27, 2015 March 30 April 2, 2015: Chapter 12 Unemployment and Inflation Good Friday April 3, 2015 April 6-10, 2015: Chapter 13 Exchange Rates Business Cycles Hw 9 and Quiz 4 due April 12, 2015 6
April 13-17, 2015: Chapter 13, Ct d Macroeconomic Policy in the Open Economy Hw 10 due April 19, 2015 April 20-24, 2015: Chapter 14 Monetary Policy and the Federal Reserve System Hw 11 due April 26, 2015 April 27-28, 2015: Chapter 15 Government Spending and Its Financing Economic Outlook Project due April 28, 2015 Study Day April 29, 2015 Final Exam, Final May 4, 10-12 in BE1001 7