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Syllabus

Economics 104H – Spring 2008

Principles of Macroeconomics

INSTRUCTOR:Wayne Carroll

OFFICE:Schneider 471

PHONE:8363388

E-MAIL:carrolwd

OFFICE HOURS:10:00-11:00 Tu and 11:00-12:00 MWF, and other times when I’m in the office.

This course provides an intensive introduction to the tools and concepts of macroeconomics. At the end of this course you should understand current debates concerning macroeconomic policies and should be able to anticipate some future macroeconomic problems.

Lectures Since most of the material in this course will be presented in the lectures, it is essential that you attend class regularly. While class attendance will not be taken into account directly in the determination of your course grade, it is likely to be reflected in your performance on exams. If you miss a lecture, you should obtain that day's notes from someone else in class, and then ask me about any remaining questions you have.

Readings The text for this course is Principles of Economics by N. Gregory Mankiw (4thedition). Reading assignments from the text are listed in the course outline that follows. Other readings will be assigned as the course progresses. Some readings and other materials will likely be posted on the D2L online site for the course, so you need to check there often for updates.

Outside Reading Requirement - As we go through the semester you will be expected to follow current macroeconomic news. By the end of the course you should be able to understand discussions of macroeconomic issues in sources such as The Wall Street JournalorNew York Times. You can subscribe to the online edition of the New York Times for free at

Grading Your grade in this course will be based on your performance on three exams during the semester, a comprehensive final exam, a short research paper, and several quizzes. Each of the four exams and the research paper will carry an equal weight in your grade, and the quizzes together probably will count about as much as one exam. Tentative dates for the exams are:

First exam:21 February

Second exam:27 March

Third exam:1 May

Final exam:Thursday, 15 May at 3:00

Makeup exams You may take a makeup exam only if you contact me before the regularly scheduled exam is given. Makeup exams will be harder than the regularly scheduled exams. Credit will be given for late assignments only if they are turned in by the beginning of the next class period.

Tentative Schedule of Topics

All readings listed below are from Mankiw. Each reading assignment listed in the schedule is to be completed before the next class meeting.

22 January /

Week 1

/

Introduction

Ten Principles of Economics

  • Current Macroeconomic Issues
Read Chapters 1, 2
24 January /

Production Possibilities and Economic Growth

Read Chapter 4
29 January /
Week 2
/ Supply and Demand
  • Demand
  • Supply
  • Market Equilibrium

31 January
(Last day to drop courses is 4 Feb.) /
Applications of Supply and Demand Curves
Read Chapter 23
5 February /

Week 3

/

Measuring National Output: GDP

  • Definition
  • Is GDP a good measure of economic welfare?
  • National output = national income
  • Real GDP
  • Using GDP and real GDP to make comparisons over time: some examples
Read Chapter 24
7 February /

Measures of the Price Level

  • The yardstick problem
  • Measures of the price level
  • Calculating the price level
  • Calculating real variables

12 February /
Week 4
/
  • Examples of real and nominal variables
  • Real and nominal interest rates
  • Read Chapter 25

14 February /

Production and Growth

  • International Comparisons
  • Productivity
  • Economic growth and public policy

19 February / Week 5 /

Review

21 February / Exam #1
For next time: Read Chapter 26
26 February /

Week 6

/

Saving, Investment, and the Financial System

  • Structure of the financial system
  • Savings and investment

28 February / Saving, Investment, and the Financial System (continued)
  • Deficits
  • The market for loanable funds
  • Determinants of interest rates
Read Chapter 28
4 March /
Week 7
/ Unemployment
  • Measuring unemployment and employment
  • Short-run determinants of unemployment
  • Unemployment in the long run: the natural rate of unemployment
Read Chapter 29
6 March /

Money, Banking, and the Federal Reserve System

  • Money
  • Banks and their role in the supply of money

11 March / Week 8 /
  • The Federal Reserve System
  • Monetary policy tools

Read Chapter 30

13 March /

Inflation

  • Money and inflation
  • The quantity equation
  • The classical dichotomy and money neutrality

17-19 March /

Spring Break

25 March /

Week 9

/
  • Welfare effects of inflation
  • The Wizard of Oz

27 March / Exam #2
For next time: Read Chapters31 and 32
1 April / Week 10 /

International Economics: Basic Concepts

  • International flows of goods: net imports
  • International capital flows: net foreign investment
  • International trade balance

3 April /
  • Exchange rates
  • Purchasing Power Parity

Foreign Exchange Markets

Read Chapter 33
8 April
(last day to drop a course with a W) /
Week 11
/

Aggregate Supply and Aggregate Demand

  • Business cycles
  • The aggregate demand curve

10 April /
  • The aggregate supply curve
  • Aggregate supply in the long run
  • Aggregate supply in the short run

Read Chapter 34

15 April /

Week 12

/

Monetary and Fiscal Policy

  • Money, interest rates, and aggregate demand
  • Effects of monetary policy on aggregate demand
  • Money neutrality revisited

17 April /
  • Effects of fiscal policy (and budget deficits) on aggregate demand

22 April / Week 13 /

Applications of aggregate demand and supply analysis

Read Chapter 35
24 April /

The Phillips Curve

  • The empirical evidence
  • The birth, death, and rebirth of the Phillips Curve
  • The Phillips Curve in the short run and the long run

29 April /

Week 14

/
  • The Phillips Curve and the natural rate of unemployment
  • Implications for government policy

1 May /

Exam #3

For next time: Read Chapter 36

6 May / Week 15 / Current Macroeconomic Issues
8May /

Current Macroeconomic Issues

15 May /

Final Exam at 3:00 in the usual room