Macro Economics, 5Th Edition, Robert Hall & John Taylor
Economics 521 Spring 2000 Dr. Stokes
Texts:
Macro Economics, 5th Edition, Robert Hall & John Taylor
Norton 1997
Study Guide Hall and Taylor's Macro Economics, 5th edition, David H. Papell,
Norton 1997
“Lecture Notes,” Prepared by Houston H. Stokes and available on web under my page.
Tests:
There will be two tests and one final; each will be worth 30% Questions will be short answer and fill in. Problems will be assigned and discussed in class. 10% of the grade will be based on class participation. There will be practice quizzes in class. All class tests will be open book and open notes. The study guide contains the type of questions that will be used. The emphasis of the course is on practical problem solving. Students are expected to do the reading prior to class. The reading consists of the text and the study guide. Approximately one chapter will be covered per class. Class participation can influence grades.
Study Tips:
Students are expected to study the chapter summaries and questions in the Study Guide that provides a good review for the tests. An the end of each chapter are a number of terms that you should master before going on. Students should do the assigned problems and be ready to discuss them in class. All answers for problems are given in the “rough” notes that are distributed. It is important that the reading be done prior to the class where it is discussed. Bring the text and the study quide to each class. A complete set of class notes is on line in MS Word 97 format. Students with laptops can down load this file and annotate these notes during the lecture. The text comes with software that allows simulation of a macro economic model. Students are encouraged to try this software. The study guide is a good review of the material. After reading each chapter try the tests. Answers are provided at the end of the study guide. Macroeconomics is best learned by problem solving, not memorization. The main purpose of this class is to equip you with the tools of analysis that will allow you to interpret economic policy changes and economic trends. What is needed is a systematic way to analyze these changes. Once the aggregate effects are determined, the micro links can be built using regression models and other tools. Excel problems will be shown in class.
I. Fundamentals of Macroeconomics
Chapter 1 The Macroeconomy: Growth and Fluctuations
- Work analytical problem # 3 page 23. Calculate the correlation between the actual rate of inflation and the two forecasts.
Chapter 2 Measuring Economic Performance: Output and Income
- Work numerical problem # 1 and # 2 on page 53 and # 5 on page 55.
II. Long-Run Fundamentals
Chapter 3 Economic Growth
- Work Numerical problems 1, 2, 3 page 95
Chapter 4 Fiscal and Monetary Policy in the Growth Model
- Work numerical problem 2 page 117 and analytical problems 1, 2, 7, 9 on page 117-119.
Chapter 5 Unemployment, Job Creation, and Job Destruction
- Work analytical problem 1 page 141
- It has been facetiously proposed that if reducing unemployment were our main objective, banning the use of farm equipment might be a solution. What effect would this have on: a. The real wage, b. Employment,
c. Unemployment, d. Labor productivity?
III. Economic Fluctuations
Chapter 6Short-Run Fluctuations and Spending Balance
- Work numerical problem 1 page 169 and analytical problems 4, 5 and 6 pages 171-172.
Chapter 7Financial Markets and Aggregate Demand
- Work numerical problem 6 on page 201 and analytical problems 3, 5 and 6 on page 202.
Test # 1
Chapter 8The Adjustment Process
- Work numerical problem 2 page 223 and analytical problems 5 and 9 page 224-225.
Chapter 9Macroeconomic Policy
- Work numerical problem 1 page 248. Work analytical problems 5, 6, 9 page 251.
IV. The Micro Foundations of Macroeconomics
Chapter 10 Consumption Demand
- Work numerical problem 2 page 291 and numerical problem 5 page 292.
Chapter 11 Investment Demand
- Work numerical problems 1-3 page 325.
Chapter 12 Foreign Trade and the Exchange Rate
- Work numerical problem 1 page 358.
Chapter 13 Spending, Taxes, and the Budget Deficit
- Work analytical problems 3, 4 and 5 page 383.
Chapter 14 The Monetary System and the Fed’s Policy Rule
- Work numerical problem 1 page 417 and analytical problem 4 page 418.
Skim Chapter 15 The Micro Foundations of Price Rigidity
- Work problem # 1 page 443.
Test # 2
V. Macroeconomic Policy
Skim Chapter 16 Inflation and Output Fluctuations
-Work problem # 1 page 467
Chapter 17 Designing and Maintaining a Good Macro Policy
- Work analytical problem 4 page 501.
Chapter 18 The World Economy
- Work analytical problem 6 page 528.
Final