Manuel H. Johnson Center for Political Economy

MANUEL H. JOHNSON CENTER FOR POLITICAL ECONOMY SORRELL COLLEGE OF BUSINESS TROY UNIVERSITY ECO 2251 Principles of Macroeconomics Professor: Dr. Daniel J. Smith Email: [email protected] Phone: 334-808-6485 Webpage: www.DanielJosephSmith.com

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” -F.A. Hayek

“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.” -Adam Smith

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance." -Murray N. Rothbard

Prerequisites

Description

Macroeconomic theory of the national economy with emphasis on income, employment, banking, and public policy.

Office Hours

M, W, & F 9:00 AM – 11:00 AM and by appointment.

Student learning outcomes - On completion of the course, the student should be able to:

1. Explain resource allocation—both market and nonmarket methods of allocation. 2. Outline the relationships among spending, output, employment, and inflation and their relation to the goals of macro and/or economic growth. 3. Explain changes in the equilibrium price level, output level, and level of employment using the aggregate demand (AD) and aggregate supply (AS) framework. 4. Assess the impact of fiscal policy on an economy. 5. Explain money creation, the Federal Reserve System, and the role of monetary policy in an economy. 2

Purpose

To provide familiarity with the fundamental concepts and theories of economics as they apply to everyday life. These include the concepts of price determination, national income accounting, governmental fiscal and monetary policy, and economic growth. Prerequisite for admission into all upper-level business courses.

Grading

Learning Curve 10% Quizzes 30% Midterm Exam 30% Final Exam 30%

Grading Scale (Percentage) A 90-100 B 80-89.9 C 70-79.9 D 60-69.9 F 0-59.9

Learning Curve Weekly Learning Curve assignments, worth 10% of your grade, will be taken on EconPortal through your Troy University Blackboard account. These Learning Curve assignments are due at 1:00 PM on the Monday prior to the beginning of class that week. I will drop your two lowest learning curve scores at the end of the semester to account for any technical issues you may experience.

EconPortal is absolutely required. There will be NO due date exceptions for anything other than a documented university approved excuse. It would be wise to plan to finish your assignments and quizzes with ample time to account for unforeseen technical, personal, or work-related issues. In other words, don’t wait to the last minute.

Students with University-Affiliated Commitments: The online Learning Curve assignments provide you with the flexibility to complete them at your convenience, taking into consideration your university-affiliated commitments, such as athletic events. It is your responsibility to know when you have scheduled commitments and to complete the assignments at an earlier time that doesn’t conflict with your schedule.

Quizzes Weekly quizzes worth 20% of your grade will be administered on EconPortal through your Troy University Blackboard account. These quizzes are due the following Monday at 1:00 PM after each week of class. I will drop your two lowest quiz scores at the end of the semester to account for any technical issues you may experience.

EconPortal is absolutely required. There will be NO due date exceptions for anything other than a documented university approved excuse. It would be wise to plan to finish your assignments and quizzes with ample time to account for unforeseen technical, personal, or work-related issues. In other words, don’t wait to the last minute.

Students with University-Affiliated Commitments: The online quizzes provide you with the flexibility to complete them at your convenience, taking into consideration your university-affiliated commitments, such as athletic events. It is your responsibility to know when you have scheduled commitments and to complete the quizzes at an earlier time that doesn’t conflict with your schedule.

Midterm Exam A midterm examination will be administered on March 5th during our normal class period.

Final Exam A final exam will be administered on Monday, May 5th at 8:00 am. 3

Extra Credit Opportunities There will be a few guest speaker opportunities for extra credit points throughout the semester. Attend the event, sign-in, and then submit a two page paper (double-spaced, Times New Roman Font 12, 1 inch margins, separate cover sheet) responding to the lecture within one week of the lecture. The following dates are tentative and the date, time, and location will be confirmed in class. Each lecture counts as 5 points (the equivalent of one essay question) on your midterm or final exam, meaning it receives a 30% weight in determining your final grade.

Dr. Derek Yonai Lecture – February 30th Dr. N. Gregory Mankiw Lecture – April 2nd Dr. Diana Thomas Lecture – April 28th

INCOMPLETE GRADE POLICY Missing any part of the Course Schedule may prevent completion of the course. If circumstances will prevent the student from completing the course by the end of the term, the student should complete a request for an incomplete grade.

Requesting an Incomplete Grade A grade of incomplete or “INC” is not automatically assigned to students, but rather must be requested by the student by submitting a Petition for and Work to Remove an Incomplete Grade Form. Requests for an incomplete grade must be made on or before the date of the final assignment or test of the term. The form will not be available after the last day of the term. A grade of “INC” does not replace an “F” and will not be awarded for excessive absences. An “INC” will only be awarded to student presenting a valid case for the inability to complete coursework by the conclusion of the term.

It is ultimately the instructor’s decision to grant or deny a request for an incomplete grade, subject to the policy rules below.

Policy/Rules for granting an Incomplete (INC)  An incomplete cannot be issued without a request from the student.  To qualify for an incomplete, the student must: o Have completed over 50% of the course material and have a documented reason for requesting the incomplete. (50% means all assignments/exams up to and including the mid-term point, test, and/or assignments.) o Be passing the course at the time of their request. If both of the above criteria are not met an incomplete cannot be granted.

An INC is not a substitute for an F. If a student has earned an “F” by not submitting all the work or by receiving an overall F average, then the F stands.

Academic Integrity

Troy University has a rigorous Standards of Conduct and Honor Code, which requires all members of the Troy University community to maintain the highest standards of academic honesty and integrity. Cheating, plagiarism, lying, and stealing are all prohibited. All violations of the Standards of Conduct and Honors Code will result in me taking the appropriate punishment procedures. See http://trojan.troy.edu/judicialaffairs/assets/documents/standardsofconduct.pdf for more information.

Troy University Email Accounts

All students were required to obtain and use the TROY e-mail address that is automatically assigned to them as TROY students. All official correspondence (including bills, statements, e-mails from instructors and grades, etc.) will be sent ONLY to the troy.edu (@troy.edu) address. All students are responsible for ensuring that the correct e- mail address is listed in Blackboard by the beginning of Week #1. E-mail is the only way the instructor can, at least initially, communicate with you. It is your responsibility to make sure a valid e-mail address is provided. Failure on 4 your part to do so can result in your missing important information that could affect your grade. Your troy.edu e- mail address is the same as your Web Express user ID following by @troy.edu. Students are responsible for the information that is sent to their TROY e-mail account. You can get to your e-mail account by logging onto the course and clicking “E-mail Login”.

Campus Disability Services

It is the policy of Troy University to provide accessible programs, services, activities, reasonable accommodations, and a harassment-free environment, for any student or employee with a documented disability as defined by Section 504 of the Rehabilitation Act of 1973, as amended, and by the Americans with Disabilities Act of 1990. To provide the best possible services to students, employees, and visitors, Troy University has designated the Disability Services Coordinator and the Director of Human Resources on each campus the responsible parties for coordinating accommodations for persons with disabilities. For more information about physical access to buildings or grounds, academic or workplace accommodations, or other ADA related services individuals should contact the Disability Services Coordinator or Director of Human Resources on the specific campus. For information regarding services at Troy main campus, contact the Director of Adaptive Needs at (334) 670-3220; for services at Troy University/Montgomery, contact the Disability Services Coordinator at (334) 241-9587; and for services at the Troy University/Dothan campus, contact the Director of Counseling and Career Services at (334) 983-6556.

Policies and procedures for students with disabilities can be found here: http://www.troy.edu/studentservices/oracle/2010-2011_Oracle.pdf

Enrollment

Students are responsible for verifying their enrollment in this class. Schedule adjustments should be made by the deadlines published in the Troy University Schedule of Classes.

Other Useful Campus Resources

Academic Catalog http://www.troy.edu/catalogs/1112undergrad_pdf/index.html

Academic Regulations http://www.troy.edu/catalogs/1011undergrad/5U_acad_regs.html#GradingSystem

Office of Student Development http://troy.troy.edu/studentdevelopment/index.html

Personal Counseling Services http://troy.troy.edu/save/counseling.html

Troy University Libraries http://library.troy.edu/

Required Textbooks  Modern Principles: Macroeconomics (2nd Edition) by Tyler Cowen and Alex Tabarrok (C&T)

Supplemental Textbooks  The Choice by Russell Roberts (RR)

Other Economic Resources I maintain a list of links to various economic topics on my blog: http://danieljosephsmith.wordpress.com/

The Library of Economics and Liberty maintains an online encyclopedia of economics at: http://www.econlib.org/library/CEE.html 5

EconTalk hosted by Russell Roberts offers podcasts on economics subjects at: http://www.econtalk.org/archives.html#category

Jodi Beggs maintains a website website of teaching videos covering microeconomic material at: http://www.economistsdoitwithmodels.com/microeconomics-101/

The Manuel H. Johnson Center for Political Economy at Troy University has a Facebook page where links to current economic topics, research and debates. http://www.facebook.com/MJCPE.TroyUniversity

Lecture Schedule and Assigned Readings

Week 1: January 8 th Introduction & Syllabus

Week 2: January 13 th & 15 th The Economic Way of Thinking

Readings: C&T Chapter 1

Assignments: Chapter 1 Learning Curve: Due Monday, January 13th at 1:00 pm Chapter 1 Quiz: Due Monday, January 20th at 1:00 pm

Week 3: January 20 th & 22 nd Trade

Assignments: Chapter 2 Learning Curve: Due Monday, January 20th at 1:00 pm Chapter 2 Quiz: Due Monday, January 27th at 1:00 pm

Week 4: January 27 th & 30 th Supply and Demand

Readings: C&T Chapter 3 & 4

Assignments: Chapters 3 & 4 Learning Curve: Due Monday, January 27th at 1:00 pm Chapters 3 & 4 Quiz: Due Monday, February 3rd at 1:00 pm

Week 5: February 3 rd & 5 th Price Ceilings and Price Floors

Assignments: Chapter 5 Learning Curve: Due Monday, February 3rd at 1:00 pm Chapter 5 Quiz: Due Monday, February 10th at 1:00 pm

Week 6: February 10 th & 12 th 6

GDP and Economic Growth

Assignments: Chapters 6 & 7 Learning Curve: Due Monday, February 10th at 1:00 pm Chapters 6 & 7 Quiz: Due Monday, February 17th at 1:00 pm

Week 7: February 17 th & 19 th Immigration and Sweatshops

Powell, Benjamin (2010). “An Economic Case for Immigration,” Library of Economics and Liberty. Available online: http://www.econlib.org/library/Columns/y2010/Powellimmigration.html Powell, Benjamin (2008). “In Defense of Sweatshops,” Library of Economics and Liberty. Available online: http://www.econlib.org/library/Columns/y2008/Powellsweatshops.html

Week 8: February 24 th & 26 th Money & Banking

Assignments: Chapters 9 & 10 Learning Curve: Due Monday, February 24th at 1:00 pm Chapters 9 & 10 Quiz: Due Monday, March 3rd at 1:00 pm

Week 9: March 3 rd & 5 th

March 3rd Review

March 5th Midterm Examination

Week 10: March 10 th & 11 th Spring Break

Week 11: March 17 th & 19 th Unemployment & Inflation

Readings: C&T Chapters 11 & 12

Chapters 11 & 12 Learning Curve: Due Monday, March 17th at 1:00 pm Chapters 11 & 12 Quiz: Due Monday, March 24th at 1:00 pm

Week 12: March 24 th & 26 th Business Cycles

Assignments: Chapters 13 & 14 Learning Curve: Due Monday, March 24th at 1:00 pm Chapters 13 & 14 Quiz: Due Monday, March 31st at 1:00 pm 7

Week 13: March 31 st & April 2 nd Monetary Policy

Assignments: Chapters 15 & 16 Learning Curve: Due Monday, March 31st at 1:00 pm Chapters 15 & 16 Quiz: Due Monday, April 7th at 1:00 pm

Week 14: April 7 th & 9 th Fiscal Policy

Assignments: Chapter 17 & 18 Learning Curve: Due Monday, April 7th at 1:00 pm Chapter 17 & 18 Quiz: Due Monday, April 14th at 1:00 pm

Week 15: April 14 th & 16 th International Trade and Finance

Assignments: Chapters 19& 20 Learning Curve: Due Monday, April 14th at 1:00 pm Chapter 19 & 20 Quiz: Due Monday, April 21st at 1:00 pm

Week 16: April 21 st & 23 rd Political Economy

Assignments: Chapter 21 Learning Curve: Due Monday, April 21st at 1:00 pm Chapter 21 Quiz: Due Monday, April 28th at 1:00 pm

Week 17: April 28 th Review

Monday, May 5th: 8:00 am – 10:00am Final Comprehensive Examination