ECON 330-01 INTERNATIONAL (MACRO)ECONOMIC EVENTS and BUSINESS DECISIONS
SeattleUniversity
Quarter: Fall, 2009 C. Fred DeKay
MW1:30pm-3:35pm (206)-296-5709
Room: P 100 Office: P 521
Office hours: MW, 11:30am-1:30 pmand by appt
M, 4-5:25 pm Bellevue Website:
Textbook Required Readings:
Macroeconomics, by Rudiger Dornbusch, S. Fischer and Richard Startz, (2008, 10th ed. McGraw Hill/Irwin). ISBN 978-0-07-312811-5.
Articles listed in the syllabus.
The Wall Street Journal, or The Economist or other financial press.
Student subscriptions to WSJ or The Economist can be found at:
(code: 1654) or
Students are expected to follow current developments in both the U.S. and world economy.
Students are especially encouraged to keep abreast of current developments in both the U.S. and world economy by reading the business news in such sources as Business Week and Fortune.
Description: INTERNATIONAL (MACRO)ECONOMIC EVENTS and BUSINESS DECISIONSis an intermediate level macroeconomics course dealing with domestic and international economic events, analysis and policy as they apply to managerial decision-making. The course prepares professional managers to understand how policies and events affect national income, business activity, unemployment, inflation and interest rates, so that they can make better informal short-run forecasts and better business decisions. The art of fiscal and monetary policymaking will also be explored along with their inherent political trade-offs, incentives and constraints. Several formal economic models are employed to illustrate relationships and illuminate differences of opinion within the profession. Class discussion will be related and applied to topics of interest in the news.
Grading: While regular class attendance is encouraged, students bear the ultimate responsibility for comprehensive coverage of the material. The basis for grading will be as follows:
30 pts Homework and oral presentations. Late homework will be penalized 50%.
50pts 2 quizzes
100pts Midterm
120pts Final
Class discussion may be considered at the discretion of the instructor. Homework assignments are designed to help you develop an understanding of and a focus on key material. Randomly chosen portions of homework assignments will be graded. Homework submitted after the first exam or quiz covering the material will not be graded.
For exams, students may use 1-page (front & back) of hand written notes on an 8.5’ x 11’ sheet. Make-up quizzes and a midterm will be scheduled immediately after the final exam. The schedule and procedures in this course are all subject to change in the event of circumstances beyond the instructor’s control. Your travel plans should not conflict with the final exam time.
Class Presentations:Once during the quarter each student will discuss during class for 2-3 minutes, a macroeconomic idea, issue, or article of your own choosing from a business news source. Useful internet sources may include: National Bureau of Economic Research, cbs.marketwatch.com, and abcnews.com.
If you have, or think you may have, a disability (including an ‘invisible disability’ such as a learning disability, a chronic health problem, or a mental health condition) that interferes with your performance as a student in this class, you are encouraged to arrange support services and/or accommodations through Disabilities Services staff in the Learning Center, Loyola 100, (206) 296-5740. Disability-based adjustments to course expectations can be arranged only through this process.
HONOR CODE: Seattle University is committed to the principle that academic honesty and integrity are important values in the educational process and that violations in this area should be dealt with in an appropriate manner.
Laptop policy: Use of electronic devices in class must be related to class work and not be distracting to other students.
TENTATIVE COURSE SCHEDULE
Homework strongly affects performance on exams. Be sure to read the assigned materials before class. Even if you don’t manage to entirely master a concept before class, reading will introduce you to the topics and will lead to a much more productive discussion in class. Exams will include questions on the readings, even if not discussed in class. Students are responsible for adjustments to this schedule that are announced in class.
Date
/Topics and Assignments
/Readings
1.9/23 / Ch. 1. Intro to Macroecon. Topics
Ch. 2. Nat’l Income Accounting: Measuring the Economy
GDP, Inflation, Unemployment, Trade Deficits, Budget Deficits / Dornbusch, Fischer & Startz, Chapters 1 and 2.
1.Testimony by Chairman Ben Bernanke, “Semiannual Monetary Report to Congress”, July 21, 2009, found at
2. The Economist, “Waiting for the midnight hour”, 4/19/01
Homework:Ch 1: Problems: Technical 1; Empirical 1. Ch 2: Problems: Technical 3. Due 10/5
2: 9/28, 30 / Quiz 1:
Measuring the economy, continued. / Dornbusch, Fischer & Startz, Ch 7, p148-174, Ch. 3, p53-61
The Economist, “Measuring what matters”,
Macro Data Presentations. Problem Set on price indices handed out. Due 10/7.
3.
10/5 & 7
10/12 & 14 / Ch. 5 Agg. Demand and Agg. Supply
Ch. 9 Income and Spending:The Determination of Output in the Short Run: The Keynesian Model ▪Y=C+I+G+X-M / Dornbusch, Fischer & Startz, Ch 9 Income and Spending (Read for understanding)
Ch 5 (Read for overview. We will return to this later. )
Ch 8 Policy Preview p. 184-188 (Read for overview. We will return to this later. )
Macro Data Presentations. Problem Set on equilibrium incomehanded out. Due 10/19.
4. 10/19 & 21 / Monetary Policy
- Money Demand
- Banking system
- Interest rates and investment credit
- Goals and Tools of the Fed
Ch 18, p445- 451;
The Economist, “A Working Model: Is the World Experiencing Excess Saving or Excess Liquidity”, 8/13/05.
Macro Data Presentations. Homework: Ch.10 : Conceptual 1,6; Due 10/26
5.
10/26 & 28
/ Policy Analysis with the IS/LM model;
Limits and risks with Monetary policy and Fiscal policy
Government budget constraint / Dornbusch, Fischer & Startz: Ch. 11, Ch 17, p 417-427
The Economist, “Putting the Air Back In”, 10/30/08.
The Economist, “Much ado about multipliers”, 9/26/09
Macro Data Presentations. Homework: Ch.11:Conceptual 4, Technical 1; Due 11/2.
6. 11/2 & 4 / Midterm Exam, 1 hour.
Theory of Economic Growth: Assessing Prospects for Output in the Long Run
Optional Reading:
“Cross-country Productivity Growth”, FRB St Louis, Nov., 2005.
publications/iet/20051101/cover.pdf
Optional:Dornbusch, Fischer & Startz: Ch. 3 and 4 for background reading / 1. Rivlin, Alice M., “The Challenge of Affluence”, Business Economics, 12/2001, pp. 6-12.
2. Jordan, Jerry, “How to Keep Growing “New Economies””, Economic Commentary Series, Federal Reserve Bank of Cleveland, August 15, 2000.
3. David M. Gould and Roy J. Ruffin, “What Determines Economic Growth?”, Federal Reserve Bank of Dallas Economic Review, 2nd Quarter, 1993, p. 25-40.
Macro Data Presentations. Homework: Outline 2 of 3 readings 1 page each. DUE 11/3. Late papers not accepted.
7. 11/9 & 11 / Assessing International Environments
Holiday 11/11 Veterans’ Day / Dornbusch, Fischer & Startz: Ch. 12
Basics of international transactions.
Macro Data Presentations.
8. 11/16 & 18 / Assessing International Environments;Exchange rates, Balance of Payments in an Open Economy.
.Policies affecting exchange rates and trade IS-LM-BP / Dornbusch, Fischer & Startz: Chapter 12
Owen Humpage , “A Hitchhiker's Guide to the U.S. Current Account Problem”, October 1, 2004,
Macro Data Presentations. Homework Ch. 12: Conceptual 4; Technical 1. Due 11/18
9.
11/23 / Quiz 2:
Aggregate Supply and Agg. Demand / Dornbusch, Fischer & Startz: Chapter 5 ,
Macro Data Presentations / “A Falling Speed Limit”, The Economist, Oct 28, 2006.
10. 11/30 &12/2 / Aggregate Supply and Aggregate Demand
Alternative theories: Real Business Cycles, Rational Expectations, Monetarists, Etc. / Ch. 6, 137-141; Ch. 19 pp 482-483
Navarro, Peter, “Principles of the Master Cyclist”, Sloan Management Review, 45(2) pp. 20-24, 2004.
Macro Data Presentations. Discussion of Navarro; Online Class Evaluations
11. 12/10 / Final Exam. Thursday, December 10, 2009 at 2:00 pm. Please adjust your travel schedule to accommodate this exam.
See the “Reading List” on the Angel website for links to articles. You will have to log onto the Lemieux Library website to access many of these materials. Let me know if you have difficulties accessing these articles. Readings are online via the Library.
Text Corrections: Ch. 8 Box 8.3. The answer in 4. is “6 percent” not “3 percent’.
Sources of Economic Data
Websites of interest:
For current economic data releases and analysis:
For Macroeconomic articles, current and historical data
Federal Reserve Board Site, Interest rates, financial data
National Bureau of Economic Research. It’s all here.
Information on economic freedom for 161 countries
World Bank assessment of business environment
World Economic forum Competitive conditions for 131 countries
Site for the U.S. Census Bureau, Family Income data
Washington State Data
of Leading Economic Indicators
Bureau of Labor Statistics. CPI, PPI, Unemployment
The World Bank
European Central Bank
International Monetary fund
Economic Report of the President
Country specific information
Bureau of Economic Analysis, GDP estimates, GDP deflator
Site for articles on macro topics.
Generic article search site
Resources for Economists
FRED
Federal Reserve Publications
Contact the individual banks to be placed on the mailing list for free publications announcements or releases of data. A few of the more useful addresses follow:
Publication ServicesPublic Information
Division of Administrative Services Federal Reserve Bank of San Francisco
Board of Governors of the Fed. Reserve System101 Market Street.
Washington, D.C. 20551 San Francisco, CA. 94105
Other branches include: Boston, Chicago, Cleveland, Dallas, Richmond, Kansas City, Minneapolis, Atlanta, New York, Philadelphia, and St. Louis
Current readings of interest:
Current readings of interest:
- William Dudley, NY Fed, Financial Market Turmoil: The Federal Reserve and the Challenges Ahead” 3/6/09.
- Charles P. Kindleberger and Robert Aliber, Manias, Panics and Crashes: A History of Financial Crises, 5th ed.,Wiley, 2005.
- Guide to Economic Indicators: Making Sense of Economics, 5th ed. (The Economist Series) 2003.
- Doing Business 2009, The World Bank, Sept. 2008.
- World Trade Indicators, The World Bank, June 2008.
- Joseph G. Haubrich, “Does the Yield Curve Signal Recession?”, April 15, 2006,
- Joseph G. Haubrich and Katie Corcoran, “What is the Yield Curve Telling Us?”, 9/19/07.
- Bernard Baumohl, The Secrets of Economic Indicators: Hidden Clues to Future Economic Trends and Investment Opportunities, Wharton School Publishing, 2005.
- Russell Roberts, The Choice: A Fable of Free Trade and Protectionism, 3rd ed., Pearson/Prentice Hall, 2007.
- Drezner, Daniel, “The Outsourcing Bogeyman”, Foreign Affairs, May/June.
- Thomas Friedman, The World is Flat,2005.
- Muhammad Yunus, Banker to the Poor, Public Affairs, 2003. Inspiring method of eradicating poverty.
- “The CommandingHeights”, a PBS website and video series on the influence of economists and macroeconomics on society over the last century. There is some good history on a number of influential economists (Keynes, Von Hayek, Marx…) and interviews with prominent politicians from many countries. You can watch the entire show on the web. (Requires Realtime player).
Academic Honesty
SeattleUniversity is committed to the principle that academic honesty and integrity are important values in the educational process. Academic dishonesty in any form is a serious offense against the academic community. Acts of academic dishonesty will be addressed according to the Seattle University Academic Honesty Policy. These acts include (but are not limited to) using unauthorized written or electronic materials on an exam, copying another student’s exam or allowing another student to copy yours, copying another student’s homework assignment and passing off someone else’s writing or ideas as your own in writing assignments. The University policy can be found at the address below:
If you are not sure whether a particular action is acceptable according to the Academic Honesty Policy, you should check with your instructor before engaging in it.If you are not certain what constitutes plagiarism please review this definition.