Economics 302 Spring 2010 University of Wisconsin Madison Menzie D Chinn Social Sciences 7418 Intermediate Macroeconomic Theory revised 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 M 1 2 4 5 provisional Social Sciences 7418 Phone 262 7397 e mail mchinn lafollette wisc edu Updated information will be posted on the course website http www ssc wisc edu mchinn web302 s10 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 Finally students will be expected to keep up to date by reading online Reuters Bloomberg or the economics sections of the New York Times or the Wall Street Journal Below is a list of reading assignments which is subject to revision LEC DATES TEXT Web 1 2 3 5 6 9 10 11 12 13 14 15 16 17 18 19 21 20 22 25 26 27 28 29 1 2 3 7 8 13 NBER Wu CBO Keynesian ISLM notes PCO notes 1 20 1 25 1 27 2 3 2 8 2 17 2 22 2 24 3 1 3 3 3 8 3 10 15 3 17 22 3 24 4 7 4 5 4 12 4 21 4 26 4 28 5 3 5 14 9 10 11 12 15 16 4 TOPICS Introduction Measuring performance Employment Short run fluctuations IS LM Govt spending taxes deficits Midterm I Monetary system Credit channel notes Credit channel ADAS notes Economic fluctuations model Consumption Investment Midterm II Open economy notes Foreign trade the exchange rate Micro foundations of price stickiness Macro policy model Taylor Rule Long run economic growth 5 13 Thursday 5 05 PM 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 Fiscal Years 2010 to 2020 January 2010 Notes on the Keynesian Model Notes on IS LM Notes on Portfolio Crowding Out PCO 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 an instructor or a teaching assistant Before utilizing the formal steps of this procedure we ask that you utilize two other means of addressing your comments our regular course evaluations anonymous and confidential commentaries solicited at the end of each semester in every Economics class and also by direct communication with the instructor or teaching assistant involved The formal grievance procedure is designed for situations where neither of these channels is appropriate and where one or both of these have been tried If you wish to file a grievance you should go to Room 7238 Social Science and request a Course Comment Sheet When completing the comment sheet you will need to provide a detailed statement that describes what aspects of the course you find unsatisfactory You will need to sign the sheet and provide your student identification number your addresses and a phone where you can be reached The Department will investigate comments fully and respond in writing to complaints Your name address phone number and student ID number will not be revealed to the instructor or teaching assistant involved and will be treated as confidential The Department needs this information because it may become necessary for a commenting student to have a meeting with the department chair or a nominee to gather additional information Your street and e mail addresses are necessary for providing a written response 6 Misconduct Statement Academic integrity is critical to maintaining fair and knowledge based learning at UW Madison Academic dishonesty is a serious violation it undermines the bonds of trust and honesty between members of our academic community degrades the value of your degree and defrauds those who may eventually depend upon your knowledge and integrity Examples of academic misconduct include but are not limited to cheating on an examination copying from another student s paper referring to materials on the exam other than those explicitly permitted continuing to work on an exam after the time has expired turning in an exam for regrading after making changes to the exam copying