Intermediate MacroeconomicsStudy Guide for Macroeconomics by O. Blanchard (5th Edition), David FindlaySchedule of Classes, Readings, and Assignments1 Ave Maria University Fall 2011 Dr. Gabriel Martinez Academic Building 2056 Email: [email protected] (239) 280-1611 http://mysite.avemaria.edu/gmartinez/ Office hours: Monday and Wednesday, 9:00-11:30am Intermediate Macroeconomics Economics 301 T Th 1:50 - 3:30 pm Academic Bldg 1026 Macroeconomics was born as a distinct field in the 1940s, as a part of the intellectual response to the Great Depression. The term then referred to the body of knowledge and expertise that we hoped would prevent the re-currence of that economic disaster. … macroeconomics in this original sense has succeeded. (Robert Lucas, Presidential Address to the American Economic Association, 2003) This course concentrates on Macroeconomics, the study of the economy as a whole. Important topics in macroeconomics include economic growth, business cycles, financial markets and the im-pact of both monetary and fiscal policy on inflation, unemployment, interest rates, investment, the exchange rate, and international trade. Building on your knowledge from Principles of Economics, by the end of the course you will be comfortable with the most important macroeconomic concepts and models and you will be able to use them to evaluate macroeconomic issues as an economist. This class will help you to think like an economist by developing and using the tools and skills of the economist in a natural, habitual way. This class will also give you a flavor of the long intellectual history of economics, its rich cast of cha-racters, and its complex roots. Intermediate Macroeconomics will put you on a firm road to be an excellent economist –or, at least, a well-informed citizen. Objectives 1. Knowledge of Institutions, Facts, and Events In this course, you’ll learn more about how the Federal Open Market Committee reacts to the economic environment. You will also learn more about certain historical events that relate to macroeconomics. Through a short paper, you’ll learn where to find information and analy-sis about an individual economic event. 2. Knowledge of Economic Terminology and Theory This course will focus on a few basic models: the IS-LM model, which is based on the Income-Expenditure and the Money Market models you al-ready know; The AD-AS model, which is based on the IS-LM model (the demand side) and on a new “labor market” model (the supply side); A Phillips Curve – Okun’s Law – Aggregate Demand model that is basically the AD-AS model in growth rates rather than in levels; The Solow Growth model; and The Mundell-Fleming model, the open economy extension of the IS-LM model. We will also look at specialized topics, such as expectations and policy. My hope is that you will be able to explain the main ideas/theories of economics in layman terms to anyone. Along the way, you will be able to identify and describe salient figures2 and concepts in the history of macroeconomic ideas. In your written work, you will apply some statistical mathematical tools to economic analysis. 3. Use of Economics to Explain and Predict Particularly through the Monetary Policy papers, you will analyze, in-terpret, and forecast basic macroeconomic trends and events, based on the principles and theories of macroeconomics. The aim of those papers (as well as selected homework problems) is to give you practice at articulat-ing sound policy arguments for or against a concrete proposal. 4. Argumentation and Research The class will emphasize clear, methodical, and systematic thinking that gives primacy to intellectual honesty, inquisitiveness, and creativity. Par-ticularly through the Monetary Policy papers, you will have an opportuni-ty to express yourself effectively through well-structured arguments, use of appropriate evidence and theory, conventional documentation, and strong oral communication skills. Readings Macroeconomics (5th Edition), Olivier Blanchard ISBN 0-13-207829-5 Study Guide for Macroeconomics by O. Blanchard (5th Edition), David Findlay ISBN 0132078333 The Secrets of Economic Indicators (2 edition), by Bernard Baumohl ISBN 0132447290 Optional Mathematical Methods for Business and Economics, Edward Dowling ISBN 0070176973 Schaum's Outline of Macroeconomics, Eugene Diulio ISBN 0070170533 You can find all these books at the Library Grading Quizzes 20% Tests 20% Mid-Term Exam 15% Final Exam (cumulative) 25% Policy Papers 15% Annotated Bibliography 5% Grading Scale Over 90 % A 90 – 80 B 80 – 70 C 70 – 60 D below 60 F3 Late Work Policy If you turn in your work more than 24 hours before the due date, you’ll get a 10% bonus. If you turn it in late, you’ll get a 10% discount for every day you are late. Example: Suppose you have work due on a Tuesday at 11:59pm Turned in before Bonus Monday, 11:59pm 10% Tuesday, 11:59pm -- Wednesday, 11:59pm - 10% Thursday, 11:59pm - 20% Friday, 11:59pm - 30% Saturday, 11:59pm - 100% Monetary Policy papers are considered late if submitted after 11:59pm on the due date. Monetary Policy papers One of the most intellectually exciting and real-world topics of macroeco-nomics is Monetary Policy. With these papers, you’ll get into the excite-ment: you will understand the effect of monetary policy and you will try to predict its course. You will write three short papers during the semester. For more details, see the webpage. • MP paper #1: Discussion of current economic and financial condi-tions. • MP paper #2: Near-term forecast of economic and financial condi-tions that affect monetary policy, focusing on identification of risks that threaten the economic well-being of the country. • MP paper #3: Recommendation as to the action the Fed should take with regard to short-term interest rates. You will work on these papers in groups of 3-4 students. Scoring is based on these criteria: • Completeness in addressing the topic. • Knowledge about the Federal Reserve's role in developing and im-plementing monetary policy. • Quality of writing (style and organization). • Quality of research (authoritative, well-cited, and well-used sources). I will be the final arbiter of what an “authoritative” source is for this class. Generally something found in the websites cited below is au-thoritative enough. • Quality of analysis (clear