Economics 302 Menzie D. Chinn Spring 2009 Social Sciences 7418 University of Wisconsin-Madison Intermediate Macroeconomic Theory 1. INTRODUCTION Economics 302 is a course in intermediate macroeconomic theory and policy analysis. Students should have a familiarity with algebra (solving simultaneous equations). Knowledge of basic calculus (partial and total differentials) and introductory statistics (linear regression) will be helpful, but not required. The main part of the course will focus on the IS-LM framework. However, considerable attention will be devoted to international aspects, such as the trade deficit, international capital flows and the exchange rate, as well as domestic issues such as the current financial/economic crisis. Students enrolling in this course should be comfortable with algebraic and graphical analysis. It requires sustained immersion in relevant economic theory, and does not present a primarily descriptive or historical approach. 2. OFFICE HOURS Professor Menzie Chinn Th 2:30-4:30 (subject to revision) Social Sciences 7418 Phone: 262-7397 e-mail: [email protected] Updated information will be posted on the course website, http://www.ssc.wisc.edu/~mchinn/web302_f09.html. 3. SCHEDULE AND READINGS The textbook is Robert Hall and David Papell, Macroeconomics: Economic growth, fluctuations, and policy, 6th Edition (Norton, 2005) available at the University Bookstore. Note that older editions of the textbook are not substitutable for the current edition. The textbook website also has some additional materials: http://www.wwnorton.com/college/econ/hat6/ Additional required readings are located under the “Required On-Line Readings” section of the course website. Commentary on current economic conditions at http://www.econbrowser.com will also be referred to on occasion. Below is a list of reading assignments, which is subject to revision.LEC. DATES TEXT Web TOPICS 1 9/3 1, 2 NBER Introduction/Measuring performance 2 9/8 3 Wu Employment 3-5 9/10-17 7 CBO Short run fluctuations 6-9 9/22-10/1 8 ISLM notes IS-LM 10 10/6 13 PCO notes Govt. spending, taxes, deficits 11 10/8 Midterm I 12-13 10/13-15 14 Monetary system 14 10/20 Credit notes Credit channel 15-16 10/22-27 9 ADAS notes Economic fluctuations model 17-18 10/29-11/3 10 Consumption 19 11/5 Midterm II 20-21 11/10-12 11 Investment 22-25 11/17-12/1 12 Open notes Foreign trade & the exchange rate 26 12/3 15 Micro foundations of price stickiness 27 12/8 16 Macro policy model/Taylor Rule 28-29 12/10-15 4 Long run economic growth 12/22 (Tuesday) 7:45 AM FINAL EXAM Readings: NBER BCDC, “Determination of the December 2007 Peak in Economic Activity” (December 11, 2008). Wu,"Two Measures of Employment: How Different Are They?" FRBSF Economic Letters 2004-23 (August 27, 2004) CBO, The Budget and Economic Outlook: An Update (September 2009). Notes on IS-LM Notes on Portfolio Crowding Out Notes on the Credit Channel Notes on Aggregate Demand and Aggregate Supply and Supply Shocks Weidner and Williams, “How Big Is the Output Gap?” FRBSF Economic Letters 2009-12 (June 12) Notes on the Open Economy 4. GRADING Letter grading is determined as follows: 20% Problem sets 50% Two midterm exams (25% each) 30% Final examination There will be no make-up midterm exams. Missed midterm exams will increase accordingly the weight assigned to the other midterm and the final exam, provided you have either (1) a valid physician’s note attesting to the fact that you have a health issue which prevents you from taking the exam, or (2) contacted your TA and/or the instructor with a reason, which is approved prior to missing the exam. Other cases are subject to the instructor’s discretion. The problem sets are an integral part of the course. Assignments will be handed into me in lecture on the appropriate date. Late assignments will not be accepted for credit. Although the problem sets do not constitute a large portion of the grade, I strongly encourage you to do the assignments in a timely and serious fashion,as they provide valuable information regarding your grasp of the concepts. 5. ECONOMICS DEPARTMENT GRIEVANCE PROCEDURE The Department of Economics has developed a grievance procedure through which you may register comments or complaints about a course, instructor, or a teaching assistant. The Department also uses course evaluations. If you wish to make anonymous complaints to an instructor or teaching assistant, the appropriate vehicle is the course evaluation. If you have a disagreement with an instructor or a teaching assistant, we strongly encourage you to resolve the dispute with him or her. The grievance procedure is for situations where neither the course evaluation nor direct contact is appropriate. To file a grievance, you should go to Social Science 7238 and request a Course Comment Sheet. On it you must provide a detailed statement about what you find unsatisfactory. You must also sign the sheet, provide your student ID number, an address and phone number. The Department investigates grievances fully and will respond in writing. Your name, address, phone number and student ID will not be provided to the instructor of teaching assistant and will be treated confidentially. The Department uses this information in case the Department Chair or a nominee wishes to meet with the student to gather additional information. The written response is mailed to the address provided by the student. 9.8.2009, rev 22.8.2009