Princeton University Department of Economics Undergraduate Program Link http faculty washington edu ghiro ECO301Syll htm Macroeconomics Spring Term 2005 Tuesday and Thursday 1 30 2 50 pm Room Computer Science 104 Syllabus Fabio Ghironi Contact Information Office 312 Fisher Hall Office Hours Tuesday 11 00 am 12 15 pm and 3 00 4 15 pm Phone 609 258 0047 E mail fghironi princeton edu or fabio ghironi bc edu http www2 bc edu fabio ghironi Preceptors Nicolas Depetris and Rujikorn Pavasuthipaisit Office TBA Phone TBA E mail depetris princeton edu and rpavasut princeton edu Precepts TBA Purpose of the Course Prerequisites Course Materials Requirements and Grading Course Outline Purpose of the Course This course covers the theory of modern macroeconomics in detail We will focus on the determination of macroeconomic variables such as output employment prices and the interest rate in the short medium and long run and we will address a number of policy issues We will discuss several examples of macroeconomic phenomena in the real world A central theme will be to understand the powers and limitations of macroeconomic policy in stabilizing the business cycle and promoting growth Prerequisites The prerequisites for this course are ECO 100 and ECO 101 Course Materials The textbook for the course is Macroeconomics by Olivier Blanchard Prentice Hall Third Edition 2003 The Study Guide by David Findlay is also required Some additional readings are listed in the Course Outline section of the syllabus including links to downloadable versions when available These readings are also available on reserve In addition you should also follow current economic events by reading newspapers Financial Times The New York Times The Wall Street Journal The Washington Post and magazines Business Week The Economist Fortune Textbook and study guide can be bundled in a value pack including also an Interactive CD and a subscription to the online version of The Economist Alternatively you can subscribe to The Economist at http www EconomistAcademic com The IMF s World Economic Outlook is a good source of information on recent economic developments and you can also download figures and data Other course materials such as my lecture notes homework and homework solutions will be posted in the course web site on Blackboard Requirements and Grading Your grade for the course will be based on a combination of requirements Approximately Weekly Homework Assignments A Midterm Exam A Final Exam Active class participation is not a formal requirement but I encourage you to ask questions at any time during lectures I want you to learn how to think about macroeconomic issues and to interpret phenomena that you are exposed to in the media Homework Assignments will help you to develop this ability The harder you work on the assignments the more likely it is that you will do well in the exams since these will consist mostly of homework type questions I encourage you to form groups to discuss the homework but each member of a group must turn in her his own answers Your homework answers will be graded by the Preceptors Nicolas Depetris and Rujikorn Pavasuthipaisit Grades will be on a scale from 0 to 100 Nicolas and Rujikorn will prepare homework answers that will be distributed and reviewed in precept meetings Precept meetings will also be occasions to discuss the additional readings mentioned in the Course Outline section of the syllabus The Midterm Exam will take place in class at our usual meeting time on Tuesday March 8 For this exam you will be responsible for the material covered up to and including the last lecture before the exam You should use the exercises in the textbook s Study Guide to practice for the midterm and final exams The Final Exam will take place on DATE TIME AND ROOM TBA The exam will again consist of homework type questions It will cover material from the entire course The weights of the various requirements in your final grade will be as follows Homework Assignments 20 percent Midterm Exam 30 percent Final Exam 50 percent Important At the end of the Course Outline I describe an exercise that will allow those of you who participate to receive extra credit Course Outline Following is a list of the topics we will cover along with the references to textbook and additional readings Part I Introduction The Vocabulary of Macroeconomics Blanchard Chapter 2 Read chapters 2 and 1 in advance in that order Macroeconomics in the Real World Blanchard Chapter 1 Additional Reading IMF World Economic Outlook September 2004 Chapter 1 Part II The Core The Short Run The Goods Market Blanchard Chapter 3 Financial Markets Blanchard Chapter 4 Goods and Financial Markets The IS LM Model Blanchard Chapter 5 The Medium Run The Labor Market Blanchard Chapter 6 Putting All Markets Together The AS AD Model Blanchard Chapter 7 The Natural Rate of Unemployment and the Phillips Curve Blanchard Chapter 8 Inflation Activity and Nominal Money Growth Blanchard Chapter 9 Additional Readings Ball Laurence and N Gregory Mankiw 2002 The NAIRU in Theory and Practice Journal of Economic Perspectives 16 4 115 136 Link NBER Working Paper version Romer David 2000 Keynesian Macroeconomics without the LM Curve Journal of Economic Perspectives 14 2 149 169 Link JSTOR Taylor John B 2000 Reassessing Discretionary Fiscal Policy Journal of Economic Perspectives 14 3 21 36 Link JSTOR The Long Run The Facts of Growth Blanchard Chapter 10 Saving Capital Accumulation and Output Blanchard Chapter 11 Technological Progress and Growth Blanchard Chapter 12 Technological Progress Wages and Unemployment Blanchard Chapter 13 Additional Readings Ball Laurence and Robert Moffitt 2001 Productivity Growth and the Phillips Curve NBER Working Paper 8421 Oliner Stephen D and Daniel E Sichel 2000 The Resurgence of Growth in the Late 1990s Is Information Technology the Story Journal of Economic Perspectives 14 4 3 22 Link JSTOR Part III The Role of Expectations Basic Tools Blanchard Chapter 14 Financial Markets and Expectations Blanchard Chapter 15 Expectations Consumption and Investment Blanchard Chapter 16 Expectations Output and Policy Blanchard Chapter 17 Time permitting we will cover some material from the following parts Part IV The Open Economy Openness in Goods and Financial Markets Blanchard Chapter 18 The Goods Market in an Open Economy Blanchard Chapter 19 Output the Interest Rate and the Exchange Rate Blanchard Chapter 20 Exchange Rate Regimes Blanchard Chapter 21 Part V
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