Principles of Macroeconomics
Office: 201 College Hall
Telephone: 895-4208 (voice mail)
Class Times: 9:15-11:30 Monday--Friday
Office Hours: 11:30-12:00 Monday--Friday (except first two Tuesdays of block)
Additional hours as needed or by appointment
Texts: N. Gregory Mankiw, Principles of Macroeconomics, fourth edition
Quantitative Reasoning Jessica Johanningmeier
Consultant: 125 Library
895- 4222 or JJohanningmeier@cornellcollege.edu
Web page: http://cornellcollege.edu/library/qrs
Macroeconomics is the study of economies as a whole. In this class we will attempt to answer five primary questions:
(1) What are the sources of growth and why do some countries grow faster than others?
(2) What creates inflation and is it possible to maintain stable prices?
(3) What are the causes of unemployment, recessions, and macroeconomic volatility?
(4) Is there anything the public or the government can do to eliminate recessions and maintain full employment of the work force?
(5) Is international trade beneficial and what are its economic implications?
In Macroeconomics, we will focus on the economic terms you are most likely to hear about on the evening news: interest rates, output, inflation, the Federal Reserve, exchange rates, and unemployment to name a few. It is because of this applicability to the real world that many of you will find Macroeconomics very interesting. It is also why an active interest in the world around you will help you understand classroom material. In fact, my goal for you in this class is simply to be able to understand the economic articles you read in the newspaper or the news you see on TV. It is for this reason that you will be well served by paying attention to current events and participating in our frequent class discussions on recent economic happenings.
Economists are often portrayed as bickering and indecisive, probably for good reason. Economists are not in total agreement on the answers to many important questions relating to Macroeconomics. Unfortunately, one of the most difficult aspects of Macroeconomics is this lack of universal truth. It is because of this that the emphasis in this class will not be on always obtaining the “correct” answer to a question (if there is one) but on addressing questions in a systematic manner. This approach differs from that used in many other topics of study and is a reason why many students often struggle in economics. As a result, it is very important for you to attend class and keep current on all material. Reading the book is a poor substitute for class attendance.
Remember: “The theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions.”
-- John Maynard Keynes
Class Format: I plan on using class time in the following way. The morning sessions will consist of lecturing from our main textbook, Mankiw. The afternoon sessions will primarily be used for three purposes. First, quizzes and exams will be given and reviewed during this time. Second, class discussions will be conducted on any assigned readings outside of the textbook. Third, in-class problems sets will be worked on in an effort to review important concepts from the lectures.
Grading: Course grades will be determined by four classes of assignments and will be based on 500 possible points. I reserve the right to use my discretion at the margin and things such as class participation will be considered in borderline cases.
(1) Exams: Two midterm exams and a selectively comprehensive final exam will be given. Each midterm will be worth 100 points and the final will be worth 130 points. If a make-up exam is needed, a time must be arranged in advance of the test date.
(2) Quizzes: Five quizzes will be given periodically throughout the term. Each quiz will be worth 20 points. The purpose of these quizzes is to give you an opportunity to identify your areas of weakness before an exam and also to ensure that you do not fall behind in class preparation. The total points from quizzes will be 100 points.
(3) Paper: Each student will be required to write one short paper on a published newspaper or magazine article of your choice. This paper should be related to a topic of current MACROECONOMIC interest and also should have some relationship to class material. Included in this paper should be a brief review of the article, an explanation of the author’s point of view, and a critical analysis of the article. This paper should be 2-4 pages long, excluding graphs, and will be worth 40 points.
(4) Class Participation: Class participation will count for 30 points toward the final grade and will be assigned on the basis of both quantity and quality of participation. Topics that are important enough to find their way onto exams will definitely be reviewed extensively in class. If you miss a class it is your responsibility to find out what announcements and other materials or assignments were presented in class.
Academic Honesty: Academic dishonesty will not be tolerated and will be dealt with in accordance with Cornell’s student regulations.
OUTLINE OF TOPICS AND
Also, additional articles and topical readings will be assigned throughout the semester.
Section 1: Introduction and the Data of Macroeconomics
Monday #1: Supply and Demand Chapter 4
Tuesday #1: Comparative Advantage Chap. 3, pg. 52-58
Wednesday #1: Measuring Output Chapter 10
Thursday #1: Measuring Inflation Chapter 11
Section 2: Growth and Long-Run Macroeconomics
Friday #1: Production and Growth Chapter 12
Monday #2: Production and Growth, cont. Handouts
Tuesday #2: The Financial System Chapter 13
Section 3: Money and Inflation
Wednesday #2: LR Unemployment Chapter 15
Thursday #2: The Monetary System Chapter 16
Friday #2: Inflation Chapter 17
Section 4: Business Cycles and Short-Run Macroeconomics
Monday #3: Aggregate Demand and Supply Chapter 20
Tuesday #3: AD and AS, cont.
Wednesday #3: Monetary and Fiscal Policy Chapter 21
Thursday #3: The Debate Over Stabilization Policy Parts of Chapter 22
Friday #3: Stabilization Policy, cont. Handouts
Monday #4: Open Economy Macro Chapter 18
Short Paper Due
Tuesday #4: Open-Economy Macro, cont. Chapter 23
Wednesday #4: Comprehensive Final Exam