Principles of Macroeconomics Economics
11C
Professor Woolf Fall 2008
www.uvm.edu/~awoolf
_________________________________________
SI Session for Exam 2: Monday, Nov 10 5:30 - 7:30 Votey 105
Podcast of Russell Roberts and Bill McKibben debate is here
Exam 1 solutions.
If the first question on your exam was "The entire group of...." click
here.
If the first question on your exam was "If the market..." click
here
Exam 2 Solution to both A and B are here.
____________________________________________________
General Information:
Phone:
656-0190
Office:
339 Old Mill
Email:
arthur.woolf@uvm.edu
Website:
http://www.uvm.edu/~awoolf/classes/fall2008/ec11/ec11.html or go to www.uvm.edu/~awoolf
and follow the links
Class meeting time: Tuesday, Thursday 2:00-3:15
Room 301 Williams
Office Hours:
Tuesday and Thursday 3:15
– 4:30 or by appointment. You do not
need an appointment to see me during my scheduled office hours.
Required Materials:
1. Timothy
Taylor, Macroeconomics: Economics and the Economy (Freeload Press, 2008)
This
is an online e-book. You can either download or read individual chapters
online at no cost to you (you do have to register, and there will be some
advertisements with the downloads) or you can order a hard copy from the
publisher for $20. If you find it easier to read a real book than an
on-line one, or if you don’t want to print out all the pages yourself, I
recommend purchasing a hard copy of the text.
The book is not available at the UVM Store.
2. Charles Wheelan, Naked Economics: Undressing the
Dismal Science (W.W. Norton, 2007)
3.
Aplia on line materials. You must register and pay ($35) for Aplia on
line (see the instructions at the end of this syllabus). Aplia consists
of on line practice and graded homeworks that will account for 20% of your
course grade. Some questions from the
Aplia assignments will appear on exams.
You will receive an email reminder when they are due, generally
weekly. Any Aplia quizzes that are not completed by the due date and time
will not be accepted by the Aplia system or by me. I will drop the two
lowest Aplia quizzes when I calculate your Aplia grade.
About The Course:
Economics 11 is a
survey course in macroeconomics, the study of how the overall economy behaves.
The course has three parts. The first
part of the course is a general overview of what economics is all about. The second part is a survey of
microeconomics, which is the study of how individual actors in the economy
(consumers and firms) behave, including demand and supply analysis. Part 3, which begins after the fist exam, is
an analysis of the macro economy, which looks at the determination of broad
economic aggregates, including the level of output and income, how and why an
economy grows, why growth is important, the role and importance of money and
banks in the economy, the problems of unemployment and inflation, and what
appropriate macroeconomic policies are.
The course has three
basic goals: (1) to introduce you to the tools and concepts of economic
reasoning; (2) to give you an understanding of basic economic theories; and (3)
to use these theories to explain and understand the workings of our economic
system. We
will do that by
explaining the behavior of the four important macroeconomic variables: output,
economic growth, unemployment, and inflation.
The course syllabus
can be found through my home page on the internet at http://www.uvm.edu/~awoolf. If you lose this syllabus,
you can print another one from that web site. All readings other than the two
texts are hyperlinked through the syllabus.
Economics 11 covers a great deal of material;
it is like learning a new language or learning to use new tools. You should
expect to at least one hour, and probably two hours, outside of class for each hour
you spend in the classroom if you want to do well in this class. A word to the wise: read each chapter before the lecture on that chapter. If
you let yourself fall behind, it will be very difficult to catch up. Each
lecture and each topic in economics builds on previous concepts.
By the end of the
course you should be able to read and understand economics articles in The Wall Street Journal, The Economist, the business and
economics pages of The New York Times, and
other publications with an economic content and have an intelligent conversation
about questions like:
·
What are the
causes of economic growth? Why are some nations more developed than others?
Fifty years ago,
·
The
·
Why did the
·
What determines
the level of unemployment in the nation? How much control does the government
have over the unemployment rate? Should we be worried about unemployment? Why?
·
What is
inflation? Why are they both problems?
·
Why is money
important in an economy? What determines
the value of a dollar?
·
Why isn’t there
enough gold in
·
What is the
Federal Reserve System and how do its policies affect the economy?
·
In 2000, the
federal government had a budget surplus of $240 billion. This year, the federal government will spend
$400 billion more than it receives in taxes, running a large deficit. What is a federal deficit? What is the federal debt? Should we be concerned about either of them?
Economics has been called the “dismal science.” If these kinds of questions are interesting
to you, then you won’t find economics dismal.
Ancillary
Material:
1.
To apply the economic concepts you are learning, I recommend the following:
The New York Times (www.nytimes.com)
including the business section, as well as other economics articles in the
Times. You need to register for the Times, but it is free.
The Wall Street Journal (www.wsj.com),
not free but well worth the $29.95 semester subscription price for the paper
copy. If you are serious about economics, you should read the WSJ for
good discussion of micro, as well as macro, issues.
2.
If you are serious about learning and truly understanding economics, read some
economics blogs. I guarantee you that if you read a couple of these
blogs each day, you will get a great exposure to how economists think about the
world. Some of my favorites are:
Greg Mankiw’s Blog
Harvard economist who maintains a website for his principles of economics
students. Get a Harvard education at UVM!
Freakonomics
Economist Steven Levitt and journalist Stephen Dubner collaborate on a New York
Times blog focusing on economics. Readable and interesting.
Vermonttiger A blog I contribute
to that looks at
Cafehayek
Economics from a libertarian perspective.
Macroblog Comments on macroeconomics and macro policy
from the Atlanta Fed. Highly recommended
for this course.
Exams
and Grading:
You will be evaluated on two midterm exams, a
cumulative final exam, and Aplia assignments. They will be weighted as follows:
|
Course Component |
Weighting 1 (MT1 is lowest score) |
Weighting 2 (MT2 is lowest score) |
Weighting 3 (Final is lowest
score) |
|
Aplia Assignments |
20 |
20 |
20 |
|
Midterm 1 |
0 |
30 |
25 |
|
Midterm 2 |
30 |
0 |
25 |
|
Final |
50 |
50 |
30 |
|
Total |
100 |
100 |
100 |
I will calculate your final exam grade using each of
the three weighting schemes and your final grade will be determined by the
highest score. If you miss or do not take one of the midterms, your
final grade will automatically revert to the other midterm weighting.
Course Schedule:
The following is a timetable
for the course. I will try to stick to
the schedule but it may change. I expect
you to do the assigned readings before the class period. If you do, you will better understand the
material we cover in class and you will do better on the exams. Assignments listed as TT refer to the Timothy Taylor text. NE
refers to Naked Economics. Other readings ware available either on the
class website or I will send them to you via email.
|
Date |
Topic |
|
Other |
|
Sept 2 |
Introduction to class What is Economics? |
|
|
|
Sept 4 |
Basic Economic Principles |
TT Ch 1 Appendix 1 (pp. 681-684) NE Ch 1,2 Leonard Reed, I Pencil Sassa Issenberg, The
Sushi Economy (The American,
July/August 2007) Recommended: Bruce Gottlieb, Why Don't Buses Have Seat Belts?,
Slate Steven Levitt (video), Why Do Crack Dealers
Still Live With Their Moms?, TED |
|
|
Sept 9 |
Choice and Production
Possibility Curve |
TT Ch 2 |
|
|
Sept 11 |
International Trade I |
TT Ch 3 Frédéric Bastiat, A Petition
(1845) |
|
|
Sept 16 |
Demand and Supply I |
TT Ch 4 Russell Roberts, Thinking Outside the
Box (Chapter 1 of The Price of
Everything) Steven Levitt and Stephen
Dubner: The
Economy of Desire, (New York Times, Dec 11, 2005) |
|
|
Sept 18, 23 |
Demand and Supply II |
TT Ch 5 NE Ch 7 The Economist, Finance: Trick or Treat (October 23, 1999) Alan Krueger, Seven Lessons About
Super Bowl Ticket Prices, New York Times (Feb 1, 2001) Recommended: Russell Roberts, Ticket
Prices and Scalping (podcast) |
|
|
Sept 25 |
Globalization |
TT Ch NE Ch 11 Paul Krugman, In Praise of Cheap Labor,
Slate (March 20, 1997) Hal Varian, An
Ipod has Global Value, New York Times (June 28, 2007) Recommended: Brook on
Vermeer’s Hat and the Dawn of Global Trade (podcast) |
|
|
Sept 30 |
Catch up day |
|
|
|
Oct 2 |
|
|
Exam 1 |
|
Oct 7 |
GDP |
TT Ch 21 NE Ch 9 Virginia Postrel, The Economic Meaning of
Manicures, Reason (October
1997) |
|
|
Oct 9 |
Wealth and Poverty: The Importance of Economic Growth |
TT Ch 22 NE Ch 12 Robert E Lucas: The
Industrial Revolution: Past and Future
( |
|
|
Oct 14 |
Unemployment |
TT Ch 23 |
|
|
Oct 16 |
Inflation |
TT Ch 24 Uncle
Sam’s Eyes in the Aisles (Washington Post Aug 29, 2006) Zimbabwe
Businesses Tackle Inflated Currency,
NPR (audio), (August 2, 2008) |
|
|
Oct 21 |
International Trade II |
TT Ch 25 |
|
|
Oct 23 |
Aggregate Demand and Supply |
TT Ch 26 |
|
|
Oct 28 |
No class (Note: Oct 31 is last day to withdraw) |
|
|
|
Oct 30 |
Keynesian Macro |
TT Ch 27 pp507-518, 529-536 |
|
|
Nov 4 |
Neoclassical economics |
TT Ch 28 |
|
|
Nov 6 |
Catch up day |
|
|
|
Nov 11 |
|
|
Exam 2 |
|
Nov 13 |
Money and Banks |
TT Ch 29 Michael Phillips, In
Some Places U.S. Currency Isn’t Sound as the Dollar, (Wall Street
Journal, Nov 2, 2006) |
|
|
Nov 18 |
The Federal Reserve |
TT Ch 30 NE Ch 10 Kevin Hassett, How
the Fed Works (American Magazine, Sept/Oct 2007) Roger Lowenstein, The
Education of Ben Bernanke (New York Times, January 20, 2008) |
|
|
Nov 20 |
Money in the International
Economy |
TT Ch 31 |
|
|
Dec 2 |
Fiscal Policy |
TT Ch 32 David Altig, Did
the Stimulus Package Actually Stimulate?
Macroblog, August 19, 2008 Gregory Mankiw, Fair
Taxes? Depends on What You Mean by Fair
(NY Times, July 15, 2007) |
|
|
Dec 4 |
Federal Deficit and Debt |
TT Ch 33 Brad DeLong, The Bush
Budget Clown Show, Feb 4, 2008 Recommended: Committee For a Responsible
Federal Budget, Promises,
Promises: A Fiscal Voter Guide to the
2008 Election (August 2008) |
|
|
Dec 9 |
International Macro
Policies |
TT Ch 34 |
|
|
Dec 11 |
The Future |
NE Epilogue |
|
|
Tuesday Dec 16 |
|
|
Final Exam 3:30 |
|
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