ECONOMICS 004 MACROECONOMIC ANALYSIS SPRING 2004 Mondays and Wednesdays 3:30pm-4:45pm 315E Olmsted Building Instructor: Nihal Bayraktar Phone: 717-948-6172 Office location: E-355 Olmsted Building Office hours: Mondays and Wednesdays: 9:30am-10:30am and 2:00pm-3:00pm; Wednesdays: 5:00pm-6:00pm; or by appointment E-mail address: nxb23@psu.edu COURSE OVERVIEW ECON 004 is one half of a two-semester sequence, which is designed to provide students with a collegelevel introduction to Economics. ECON 004 introduces students to Macroeconomics. This course will focus on the economy of the United States and global issues dealing with business cycles, national income, employment, economic growth, international finance and trade, and government economic policies. We will determine why those issues are important to us and ask whether anything can or should be done about them. COURSE GOALS To understand how to think like an economist. To identify the macroeconomic aspects of a particular situation. Develop a significant understanding of macroeconomic terminology Study selected macroeconomic models Increase your understanding of fiscal policy and of monetary policy, theory, and institutions Increase your awareness of current macroeconomic issues such as budget deficits, unemployment, and recession, and their impact not only on the economy as a whole but on you as an individual Become familiar with various common measurement techniques (for unemployment, inflation, GDP, the money supply, etc.) Finally, to examine everyday economic decisions and policy issues, which is the best way to understand the principles of macroeconomics. Therefore, we will spend a lot of time applying the tools we learn to current events and policy issues. Students are encouraged to be reading the Wall Street Journal and to bring in topics for class discussion. REFERENCES TEXT: Joseph E. Stiglitz and Carl E. Walsh, Principles of Macroeconomics, third edition. New York: W.W. Norton and Company, 2002. Web Site: http://www.wwnorton.com/stiglitzwalsh/macroeconomics/index.htm The web site includes chapter summaries, conceptual and practice quizzes. STUDY GUIDE: Lawrence W. Martin, Study Guide for Stiglitz and Walsh s Principles of Macroeconomics, third edition. New York: W.W. Norton and Company, 2002.
Additional readings will be handed out in class. CLASS SESSIONS Most class sessions will include these activities: Lecture on assigned textbook chapter(s). Class discussion of selected problems and questions at the end of each assigned chapter. Review of some articles from different journals and newspapers. The articles will be given as handouts beforehand. I will post summary power point presentations on ANGEL. I expect you to study from the text and the study guide before each class meeting in the light of these presentations. Since we will discuss some questions, problems and articles, I will not have time in class to go over every point in the text. If you come to class without doing the reading, you will not be able to fully benefit from the class room discussion and exercises. Class time is best used for working out the implications of material you have already first encountered in your own studying. MATHEMATICAL APPROACH Economics uses mathematical modeling as tool to understand complex human behavior. In this course, we will use simple mathematical models. But, I will try not to let these mathematical models distract from the economic theory they are assigned to illustrate. If you have a solid grounding in basic algebra and quantitative relationships, you should have no trouble with the quantitative content of the course. You have to be able understand and interpret graphs, make calculations from tables of figures, and solve simple algebraic equations in order to keep up with the class material. EXAMS There will be three tests: 1) midterm exam 1 (February 16, 2004) 2) midterm exam 2 (April 05, 2004) 3) final exam (May 05, 2004 at 11:00am-01:00pm) The midterm and final exams will consist of multiple choice and essay questions. They will be closed book exams. The final exam is cumulative.
PROBLEM SETS Because doing economics is the best way to learn and to determine whether you understand the concepts we are discussing in class, you will be asked to solve problem sets. There will be 5 sets of problem sets assigned during the course. They will consist of essay questions. You might be asked to discuss some cases or articles from different journals or newspapers in these problem sets. These problem sets will be quite helpful for you to get prepared for the exams. You can work together with other students on questions, since discussing the problems with others should increase your understanding of the course material. However, it is absolutely necessary that you alone write up solutions. Solutions that are too similar will get a zero. The solutions will be discussed in the classroom. Problem sets Will be given on Deadline (at 5:00 pm) Problem set 1 January 19, 2004 January 26, 2004 Problem set 2 February 02, 2004 February 09, 2004 Problem set 3 March 01, 2004 March 15, 2004 Problem set 4 March 22, 2003 March 29, 2004 Problem set 5 April 19, 2004 April 26, 2004 CLASS PARTICIPATION You should respond in class to discussion questions and problems given at the end of assigned chapters in the textbook and materials related to assigned articles. Your voluntary participation in class discussions will improve your participation grade. You should maintain a positive class environment for learning. Class participation will be graded as 10 percent of your final grade. COURSE GRADING 5 problem sets worth 20 points (4 points each) Mid-term exam 1 worth 20 points Mid-term exam 2 worth 20 points Final exam worth 30 points Class participation worth 10 points You will receive a score of points on each exam, but no letter grade. At the end of the semester, you will receive a letter grade for the course according to your total points and the grade scale below. Grading Scale Points 91 and above A 86-90 A- 81-85 B+ 76-80 B 71-75 B- 66-70 C+ 61-65 C 50-60 D Below 50 F Grade
Tentative Course Structure Week Topic Chapters Jan. 12-14, 2004 Macroeconomics and the Economic Perspective (1) How to think like an economist (1) Ch 1 Ch 2 Jan. 19-21, 2004 How to think like an economist (continued) (0.5) The price system (1.5) Ch 2 (cont d) Ch 3 Jan. 26-28, 2004 The price system (continued) (0.5) Households, Firms, and Market Outcomes (1.5) Problem set 1 (Jan. 26, 2004) deadline Ch 3 (cont d) Ch 4 Feb. 02, 2004 NO CLASS ON FEBRUARY 02, 2004 Feb. 04, 2004 Macroeconomic goals and measurement (1) Ch 5 Feb. 09-11, 2004 The full-employment model (1) Ch 6 Money, Banking and Credit (1) Ch 7 Problem set 2 (Feb. 09, 2004) deadline Feb. 16-18, 2004 Midterm 1 (Feb. 16, 2004) Money, Banking and Credit (continued) (0.5) Government finance and the open economy at fullemployment (0.5) Feb. 23-25, 2004 Government finance and the open economy at fullemployment (continued) (1) Growth and productivity (1) Mar. 01-03, 2004 Introduction to macroeconomic fluctuations (1) Aggregate expenditures and income (1) Mar. 15-17, 2004 Aggregate demand and inflation (1.5) Inflation and unemployment (0.5) Problem set 3 (Mar. 15, 2004) - deadline Ch 7 (cont d) Ch 8 Ch 8 (cont d) Ch 9 Ch 10 Ch 11 Ch 12 Ch 13 Mar. 22-24, 2004 Inflation and unemployment (continued) (1) The role of macroeconomic policy (1) Ch 13 (cont d) Ch 14 Mar. 29-31, 2004 Policy in the open economy (2) Ch 15 Problem set 4 (Mar. 29, 2004) - deadline Apr. 05-07, 2004 Midterm 2 (April 05, 2004) The international financial system (1) Ch 17 Apr. 12-14, 2004 The international financial system (continued) (0.5) Controversies in macroeconomic policy (1.5) Ch 17 (cont d) Ch 18 Apr. 19-21, 2004 Government financial policy, deficits, and surplus (2) Ch 19 Apr. 26-28, 2004 Development and transition (2) Ch 20 Problem set 5 (Apr. 26, 2004) - deadline May 05, 2004 at 11:00am-1:00pm FINAL EXAM Note: Expected class numbers are given in parenthesis.
OTHER CLASS POLICIES STUDENTS WITH DISABILITIES Penn State welcomes students with disabilities into the University s educational programs. If you have a disability-related need for modifications or reasonable accommodations in this course, contact the Disability Service Coordinator in the Student Assistance Center (W-117 Olmsted, 717-948-6025). The instructor should be notified as early in the semester as possible regarding the need for modification or reasonable accommodations. RELIGIOUS HOLIDAYS If you miss any days during this fall semester for religious holidays, please examine the course schedule carefully and notify me within the first week of class so that I can accommodate you better. ATTENDANCE POLICY You are expected to attend each class. I reserve the right to expel any student who does not participate in this course on a regular basis. MAKE-UP POLICY All exams must be taken at the assigned date and time, all assignments (problem sets) must be turned in no later than the specified date and time, or a zero will be recorded. An exception to this policy will only be granted for serious circumstances that are beyond your control. Arrangements for an exception must be made as soon as possible and in advance if at all possible. You should be prepared to provide evidence that the situation is indeed beyond your control. SYLLABUS CHANGES Information in this syllabus is subject to change. All changes will be announced in class.
FINANCE AND ECONOMICS PROGRAM School of Business Administration Capital College STATEMENT OF ACADEMIC INTEGRITY Students will pursue their activities for this course without fraud or deception. This applies to any work submitted for credit. They should consult with the Instructor about the appropriateness of any action about which they are in doubt. Any form of copying that does not identify the source of the original work is not acceptable and will not receive credit. Students should protect their work from unauthorized copying. Plagiarism is not acceptable. Students will not attempt to claim credit for work they did not perform nor are they to appropriate the work of others without giving explicit due recognition to this work, or to its author(s). While taking examinations, or in the preparation of any other papers or presentations required in a course, students may use only those materials permitted by the instructor, such as formula lists and calculators, that might be used during examinations. Class members cannot give information to, nor receive information from, other class members during any examination or quiz. Class members must not copy from, nor refer to, the work of others during examination periods. Plagiarism, copying and communication during examinations, and use of materials prohibited by the instructor will subject a student to a grade of F for the course in which these activities occur, and/or other disciplinary sanctions. Class members will promote a constructive learning environment in the classroom. They must be respectful of the rights of others and they should not jeopardize the ability of others to learn. Faculty members may file accusations of academic misconduct with the Academic Integrity Committee of Capital College, along with recommended disciplinary sanctions. The Academic Integrity Committee provides accused students with specific rights and procedures for appeal. ACCOMMODATION It is Penn State's policy not to discriminate against qualified students with documented disabilities in its educational programs. If you have a disability-related need for modifications in this course, contact the Disability Service Coordinator in the Student Assistance Center (W117 Olmsted ; 948-6025).