1SyllabusEcon 202: Macroeconomic PrinciplesInstructor: Matias ZelikowiczClass: M/W 10:00 – 11:45Fall 2012Towson UniversityCourse IntroductionThis is an introductory level course on macroeconomics, theory and policy. We willfocus on the basic laws of supply and demand, structure and measurement of macroaggregates, the tools of macro policy, the institutions and agencies that promulgate andimplement such policies, and we will explore how the foreign exchange and globalcapital markets function. Along the way, issues of inflation and deflation, unemploymentand labor markets, saving and investment, the balance of payments, economic growth,sovereign debt and financial crises will also be discussed.Course Materials Required: Michael Parkin Macroeconomics, 10thEdition, 2010. Published byPearson Addison and Wesley (Hereafter referred to as Parkin.) Strongly Recommended: A subscription to The Economist magazine.Learning objectives: At the end of the course, a successful student will be able to: Download, read, manipulate, analyze, and present macro statistics in order tosupport or oppose a policy action; Construct data indices and deflate series for inflation; Calculate growth rates of various macro phenomena; Gain a clear working knowledge of the economic tools of monetary and fiscalpolicy, the institutions that utilize them, and how they can affect the short termfluctuations in the economy; Understand how global capital market enable savings to shift from low- to high-return investments, and how exchange rate and interest rate changes interact inthese markets; Synthesize information on past global financial crises to clarify the current debateover regulation in these fast-moving markets; and, Be able to reason intelligently about current macro policy issues as they are beingdebated.
2Some very useful websites to visit: World Bank Databank. http://databank.worldbank.org/ddp/home.do IMF Data Mapper. http://www.imf.org/external/index.htm Bureau of Economic Analysis (http://bea.gov/index.htm) and Flow of Fundsaccounts from the Federal Reserve:http://www.federalreserve.gov/releases/z1/Current/data.htm All of the Federal Reserve Banks have websites with research papers. Thegeneral search screen for all of the regional Fed banks is: http://www.phil.frb.orgFRB of St. Louis: http://research.stlouisfed.org/index.htmlFRB of New York: http://www.ny.frb.org/Course Requirements: Macro, like all economics, is best learned by doing. That meansreading articles, synthesizing the contrasting arguments into a more coherent whole, andplaying with models and data to shed light on the behavior of the economy and itsaggregates. I believe strongly in teaching you to write clearly and well, to manipulatesimple economic calculations and understand what you’re doing, and to make clear,informed presentations based on your economic analysis. To that end, my assignmentshave research and writing, oral presentations, and economic analysis. Current Event Reports: For this assignment, you are to read a current article1on amacro topic of interest, prepare a written summary and analysis of the macroconcepts in the article, and present it in class. This report should be no more than1-3 double-spaced pages and you must attach a copy of your article with yourreport when you hand it in on the day of your presentation (this should last foronly 10-12 minutes.) CERs are to be delivered at the beginning of class on yourdue date, and each report is worth 15% of your grade. Problem Sets: You will be assigned TWO problem sets, consisting of shortanswer questions, quantitative problems, and some research questions. Youranswers must be neatly typed on clean 8.5x11” paper, and they are due on specificdue dates. No late submissions are accepted. Cumulatively, the problem setsare worth 40% of your grade. Exams: There will be one in-class midterm exam, and one take home final exam.The midterm will be held on, October 1, 2012. The midterm is worth 20% ofyour grade, and the final exam will be worth 25% of your grade. Class participation: Regular attendance, active and thoughtful participation inclass discussions, and enthusiasm are expected in class, and will enhance yourchances of earning a higher grade.Grading PolicyAll of your assignments will be graded carefully, however, I realize that grading mistakesare occasionally made. I will re-grade your work if you submit your request in writing,explaining why you feel you deserve a re-grade, and attach your original submission. Ido not discuss grades. (Re-grades must be requested within one week of receiving your1Articles are to be drawn from reputable, published periodicals (in English). These include The Economist,The Wall Street Journal, CNBC, Bloomberg, The Financial Times, etc. Check with me if you’re unsureabout your article or source.
3graded assignment, and the original assignment must be attached.) I will respond inwriting, and I reserve the right to re-grade the entire assignment. You must follow thispolicy for your work to be reconsidered.Academic IntegrityPlagiarism is a serious academic offense that can result in a failing grade on thesubmitted assignment, an F in the course. Plagiarism includes paraphrasing (even asentence or a phrase) or cutting and pasting directly from another person’s writingwithout proper citation. You MUST cite the author and source correctly, using footnotesor endnotes and quotation marks to clearly distinguish between your words and those ofanother author. Always give credit where credit is due, and NEVER cut and paste froman article without using quotation marks and citing the source in a footnote.I encourage you to work with each other, since you can learn more by discussingconcepts and ideas than by just studying on your own. HOWEVER, when it’s time towrite your assignments, you MUST do your own workCourse ScheduleThe following is a list of assigned readings and the tentative dates on which I expect tocover them. Please note that I expect everyone to do all of the readings, and to bring theirpersonal computers to every class meeting (if you do not have a personal computer do notworry talk to me and we will solve it).9/3: Week 1: Brief Introduction to Twentieth Century History of Economic Thought,“The Great Recession” and Basic Concepts Video: The Commanding Heights. Episode 1, Chapters 2, 3,4 “Hayek vs.Keynes”, “Communism vs. Capitalism”, “Inflation vs. The People” IMF (2012) “Tracking the Global Recovery”(open the PDF)http://www.imf.org/external/pubs/ft/fandd/2012/06/kose.htm9/5: Parkin, Chapter 1, “What is Economics” Michael Bordo (2008) “A Historical Perspective on the Crisis of 2007-2008”Central Bank of Chile. http://www.nber.org/papers/w14569.pdf Introduction to the World Bank Databank9/10: Week 2: Measuring Macroeconomic Aggregates, PPF, Opportunity Cost Nominal GDP, Real GDP vs. GNP, GDP Deflator. Percentage change, CAGR (Compounded or Average Annual Growth Rate) Parkin, Chapter 5 “Measuring GDP and Economic Growth”.9/12 Parkin, Chapter 2 “The Economic Problem”(only pages 31-39) Video: Dateline’s “China’s Ghost Cities and Malls”http://www.youtube.com/watch?v=rPILhiTJv7E
49/17* No class Watch the CNBC documentary “House of Cards”http://video.cnbc.com/gallery/?video=1145392808 Watch PBS documentary “Inside the Meltdown”http://www.pbs.org/wgbh/pages/frontline/meltdown/view/ Parkin, Chapter 3 “Demand and Supply”9/19: Week 3 Parkin, Chapter 3 “Demand and Supply”9/24 Week 4 Parkin, Chapter 4 “A First look at Macroeconomics”9/26 Parkin, Chapter 5 “Monitoring Cycles, Jobs, and the Price Level” James Sherk, The Heritage Foundation “Technology Explains Drop inManufacturing Jobs”. http://thf_media.s3.amazonaws.com/2010/pdf/bg2476.pdf Michael Elsby, B. Hobijn, and A. Sahin (2010), “The Labor Market in the GreatRecession,” Federal Reserve Bank of San Francisco Working Paper 2010-07,March. http://www.frbsf.org/publications/economics/papers/2010/wp10-07bk.pdf Carl Walsh (2004), “The Productivity and Jobs Connection: The Long and theShort run of It,” FRBSF Economic Letter, 16 July 2004 (18).http://www.frbsf.org/publications/economics/letter/2004/el2004-18.pdf10/1 Assignment #1 is due at the beginning of class. Please bring a hard copy ofyour Word document with your answers to class. Review for the Mid-Term ExamMidterm Exam: Wednesday, October 3, 2012 (in class)
510/8 and 10/10 Parkin, Chapter 6 “Economic Growth” Radlet, Linddauer, Chapter 3 Economics of Development “Concepts andPatterns” and Chapter 4 Theories of Economic Growth” (pages ?) on Blackboard Xavier Sala-i-Martin “Sources of Growth”http://www.jvi.org/uploads/tx_abaeasydownloads/Sources%20of%20Growth.PDF Hal Cole, et. al. (2004), “Latin America in the Rearview Mirror,” NBER WP11008, December. Philippe Aghion, Diego Comin, Peter Howitt, and Isabel Tecu (2009), “WhenDoes Domestic Saving Matter for Economic Growth?” NBER WP 12275, revisedJanuary.http://www.economics.harvard.edu/faculty/aghion/files/When%20Does%20Domestic%20Saving%20Matter.pdf B. Bosworth and S. Collins (2008), “Accounting for Growth: Comparing Chinaand India,” Journal of Economic Perspectives, 22(1), Winter, p. 45-66. M. McMillan and D. Rodrik (2011), “Globalization, Structural Change, andProductivity Growth,” NBER WP#17143, June. G. Bekaert, C. Harvey, and C. Lundblad (2009), “Financial Openness andProductivity,” NBER WP #14843, April.10/15 Current Event Report Group Presentations10/17 Current Event Report Group Presentations continue10/22Poverty and InequalityRadlet, Linddauer, Chapter 6 Economics of Development “Poverty and Inequality”(Blackboard)Video: Margaret Thatcher http://www.youtube.com/watch?v=KHA7YXsu110 Assignment # 2 will be distributed10/24Parkin, Chapter 7Video: Commanding Heights Episode Three: “Capital Mobility and Financial Crisis”
610/29Parkin, Chapter 7 Assignment # 2 will be due at the beginning of class10/31Parkin, Chapter 811/5No Class -Please read Chapter 1011/7Parkin, Chapter 10 AD-AS11/12Parkin, Chapter 10 AD-AS11/14Parkin, Chapter 10 AD-AS Macroeconomic Equilibrium (Stagflation, Inflation,Recession)Parkin, Chapter 11Parkin, Chapter 1211/19Parkin, Chapter 13 Fiscal Policy11/21Parkin, Chapter 9 Exchange Rates and the Trade DeficitD/Y Debate11/26No Class-Holiday11/28Parkin, Chapter 14 Monetary PolicyClosing remarks, and take home final exam will be distributedTake home final exam is due on December 1stat 12 am (you must email it to me).