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Macroeconomics
Economics 2020
David Kiefer
telephone 581-7481
e-mail: kiefer@economics.utah.edu
course website: webct.utah.edu
This is an introductory course in
macroeconomic theory. Macroeconomics was born in the depths of Great
Depression. Prior to this social catastrophe, economy-wide recession was little
studied by theorists who held it to be a temporary and self-correcting
deviation from full employment. Prior doctrine held that government policy
could do little to affect the level of unemployment. John Maynard Keynes
changed all this. He propounded the theory that for various reasons recessions
and depressions may last a long time. But, by manipulating taxes, government
spending and the money supply, the government could return the economy to full
employment. We now have well-developed theories of how this manipulation should
be done. Many economists work in
The Keynesian analysis is a
short-run one, a longer view of the macroeconomy focuses on the sources of
economic growth. This is a particular vital issue to the less developed nations
of the
Although
primarily a theoretical course, statistical evidence is examined in the
evaluation of the competing theories. We also consider a variety of
applications and extensions, such as macroeconomics in the global setting. The
application of economic theory to new situations is emphasized in the
assignments and exams. My course goal is to teach you to think like an
economist.
The text Principles of Macroeconomics by N. Gregory Mankiw is available at
the University Bookstore.
Grades are based on weekly written
assignments, the midterm and the final exam according to the following weights:
·
weekly homework assignments 30%
·
midterm exam 30%
·
final exam 40%
The
assignments are crucial to the course and are reviewed in class. If you
seriously attempt all assignments, you chance of doing well on the exams is
much improved. Both the midterm and the final are a combination of multiple
choice questions and longer problems; both are closed book both are
comprehensive in coverage.
I
will compute final grades by three methods; your grade will be the highest of
the three:
·
The curve: with an overall average grade of B-
(GPA=2.7),
·
The traditional standard: with h 100-93%=A,
92-90%=A-, 87-89%=B+, 83-86%=B, 80-82%=B-, and so on to 59-0%=E,
·
The ace-the-final rule: you get an “A” for the
course if you score an “A” on the final exam regardless of your point total.
As
a general rule I do not give incomplete grades. Late assignments lose points; copies and exact duplicates are unacceptable.
Exams must be taken at the scheduled time.
Topic Outline
1.
Introduction to
economics
scarcity: the basic problem
marginalist thinking
comparative advantage
globalization controversy
efficient markets
2.
Basic market
theory
demand
and supply
market
equilibrium
government
intervention
many
applications of elasticity
connection to revenue
3.
Introduction to
macroeconomics
linking
micro and macro
central
questions of macroeconomics
measuring national output and
national income
the cost of living
4.
The long run
long-run
prosperity and productivity
investment,
saving and national income accounts
present
value
finance
and investment advice
disequilibrium
in the labor market and the natural rate of unemployment
5.
Inflation and
money
money and inflation
demand and
supply for money
banks and the
Federal Reserve
neutrality of money and the quantity
equation
6.
The open economy
trade balance
exchange rates
open economy equilibrium
twin deficits: government and trade
government policy
7.
The short run
linking the goods market and the
money market
short-run business cycle
fluctuations
demand and supply driven recessions
8.
Government policy
monetary policy
fiscal policy
the multiplier
crowding out
9.
The Phillips curve
unemployment-inflation trade-off
short-run and long-run
expectations
costs of fighting inflation
10. Debates,
conclusions and review
activist policy
rules or discretion
inflation targeting
balancing the budget
tax reform