Econ 210D: Intermediate Macroeconomics

Econ 210D: Intermediate Macroeconomics Duke University, Summer 2016

Class: M-F 9:30-10:45 AM Soc Psy 129 Discussion: W 6:00-8:05 PM Soc Psy 129

Final Exam: Thursday, June 30th 9:00 AM- Noon

Instructor: Christopher Roark Email: [email protected] Office Hours: Will discuss first day of class

Text: Barro Robert. Macroeconomics. Fifth Edition. Cambridge, Massachusetts, The MIT Press.(1997)

Prerequisites: 1.) Economics 201D 2.) Economics 205D (or as a co-requisite at your own risk) 3.) Mathematics 202, 212 or 222

No Open Computers in Class

Course Description: Intermediate level treatment of macroeconomic models, fiscal and monetary policy, inflation, unemployment, economic growth with a focus on micro-founded models.

Course Objectives: The purpose of this course is to give you a fundamental understanding of modern micro-founded macroeconomic models. By the end of this course you should be able to: 1.) Describe the basic principles of Macroeconomics 2.) Analyze economic data and describe with an appropriate model 3.) Judge statements made by economists and policy makers at least at a basic level. 4.) Analyze theoretical models at a basic level.

Grading Scheme: Problem Sets (≈5): 10% Midterm: 40% (25% if better on Final) Final: 50% (65% if better on Final)

1 Honor Code:

All students should abide by the Duke University Community Standard. :

 I will not lie, cheat, or steal in my academic endeavors;  I will conduct myself honorably in all my endeavors; and  I will act if the Standard is compromised.

I will not hesitate to report any academic dishonesty to the University Administration. This includes incidences of plagiarism in the final paper.

Disability Statement

Students with disabilities who believe that they may need accommodations in the class are encouraged to contact the Student Disabilities Access Office at 919.668.1267 or [email protected] as soon as possible to better ensure that such accommodations are implemented in a timely fashion.

Preferred Contact

Please contact me via email ([email protected]) with any questions or comments. I should respond within 24 hours of receiving your email.

Classroom Policies

I will not offer a makeup midterm, if you have a University approved excused absence the problem sets will count for 30% of your grade and the Final will count for 70% of your grade.

If you do better on the Final Exam than the Midterm, the Final will count for 65% of your grade and the Midterm will count for 25% of your grade. I will always use your best score to determine the class distribution and the course grade.

I will only regrade exams taken in pen. These requests must be typed and returned within two days of receiving the midterm exam back. You need to explain why you think a certain question is incorrectly graded. If you do ask for a regrade I will regrade the entire exam and your grade can go up or down accordingly.

Problem Sets will be due at the beginning of each discussion section on Wednesday. I will post problem sets on each Friday on Sakai. They will also be returned in the next discussion section. I do not mind if you work together on problem sets however each individual must turn in a separate problem set for me to grade. I will not give you help on problem sets until after they are due. I don’t mind clarifying questions but I’ll only be hurting you if I tell you exactly how to solve them.

2 I will grade your problem sets for correctness however I may modify grades upwards if you are participating in class and you’ve made a genuine effort on every question. Problem Sets should be reinforcement for what you’re covering in class.

I will post all grades on Sakai. If your grades on Sakai do not match up with the returned assignment come talk to me and we will get it sorted out.

Finally I’m always open to conversations about grading clarifications. However, I am less inclined to argue with you about your grades. Asking me why something is incorrect is fine, whereas, asking me whether I think your answer should be worth more points is not.

Office Hours will be held in the graduate student lounge on the third floor of the Social Sciences Building.

Topics: Note: Lecture numbers are tentative

I. Introduction 1 Lecture Economic Modeling and Data Short Run vs. Long Run Classical Economics (Chapter 1)

II. Robinson Crusoe 1 Lecture Leisure and Consumption in a static Model Substitution and Wealth Effects (Chapter 2)

III. Credit Markets, Leisure and Consumption in a Dynamic Model 3 lectures Intertemporal Substitution Effects Theories of the Consumption Function Aggregate Supply and Demand Functions (Chapter 3)

IV. Money Demand 3 Lectures Chapters 4 and 17

V. The Basic Market Clearing Model 2 Lectures Chapter 5

VI. Inflation 3 Lectures Actual vs Expected Inflation Nominal vs Real Interest Rates

3 Chapters 7 and 8

VII. Labor Markets 3 Lectures Wage Determination Unemployment and Search Chapters 6 and 10

4 VIII. Investment Firm Behavior and the Business Cycle 2 lecture dates Chapter 9

Midterm. Date: Friday Jun 10th in class (Aim to cover sections I-VII)

IX. International Economics 2 lecture dates Current Account, International Debt Terms of Trade and Real Exchange Rate Determination Purchasing Power Parity, Interest Rate Parity, and Nominal Exchange Rate Determination (Chapters 15 and 16)

X. Government and Fiscal Policy 5 lecture dates Public Spending (Chapter 12) Taxes, Transfers and Distortions: The Laffer Curve and Supply Side Economics (Chapter 13) Debts and Deficits: Ricardian Equivalence Theroem of Debt Neutrality (Chapter 14)

XI. Economic Growth 2 lecture dates Chapter 11

XII. Monopolistic Competition 2 lecture dates if time

Final Exam: June 30th 9 AM – Noon