Economics 207: Introduction to Macroeconomics

Economics 207: Introduction to Macroeconomics Spring Quarter, 2015 Professor: Dr. John M. Krieg Webpage: http://faculty.wwu.edu/kriegj/ Office: Parks Hall #307 Office Hours: T,H 1-2:00 or by appointment Telephone: 650-7405 E-Mail: [email protected]

Course Objectives: My objective in this course is to provide you with two basic understandings: an understanding of the structure of modern economies and an understanding of the standard tools economists apply when analyzing the macroeconomy. After successful conclusion of this course, students should be able to demonstrate · an understanding of the participants in the macroeconomy; · an understanding of basic tools of measurement of the macroeconomy such as inflation, unemployment, and economic growth; · a rudimentary understanding of the history and structure of the American economy; · an understanding of the use and application of economic models such as the Keynesian Cross and Aggregate Supply/Aggregate Demand; · an understanding of the links between the macroeconomy and various global, social, political, environmental, and technological issues. Resources: I have assigned two textbooks for this class. The first, Bade & Parkin’s Foundation of Macroeconomics (B&P) is a standard textbook which lays out basic information regarding macroeconomics. The second, The Economics of Macro Issues by Miller and Benjamin (M&B), is a reader on recent macroeconomic topics. Together, these books will give a basic understanding a foundation for class discussions. I also maintain a webpage that includes past 207 exams, current exams with answers, grades, announcements, and handouts.

Course Outline: A “rough” outline of a schedule of our topics is: Tuesday, March 31 Introduction & the Circular Flow B & P Chapters 1 & 2, M & B Ch. 1 Thursday, April 2 Circular Flow & GDP B & P Chapter 5, M & B Chapters 2, 6, & 7 Tuesday, April 7 Thursday, April 9 Jobs and Unemployment B & P Chapter 6, M & B Chapter 9 Tuesday, April 14 Inflation and the Price Level B & P Chapter 7, M & B Chapters 11 & 12 Thursday, April 16 Tuesday, April 21 Potential GDP and the Natural Rate B & P Chapter 8 Thursday, April 23 Midterm #1 Tuesday, April 28 Economic Growth B & P Chapter 9, M & B Chapters 3 -5 Thursday, April 30 Finance and Saving B & P Chapter 10 Tuesday, May 5 Thursday, May 7 The Monetary System and Interest B & P Chapters 11 & 12, M & B Chapters 20- Tuesday, May 12 Rates 23 Thursday, May 14 Midterm #2 Tuesday, May 19 Aggregate Supply B & P Chapter 13 Thursday, May 21 Aggregate Demand B & P Chapter 13 Tuesday, May 26 Multipliers B & P Chapter 14 Thursday, May 28 Short-run Policy Tradeoff B & P Chapter 15 Tuesday, June 2 Fiscal Policy B & P Chapter 16, M & B Chapters 13 & 18 Thursday, June 4 Monetary Policy B & P Chapter 17 The astute reader will notice at least two things from the course outline. First, I hope to cover a significant portion of the B&P text. In order to accomplish this ambitious goal, I ask students to read chapters ahead of lectures. This will aid in covering material in a timely fashion and allow for a deeper discussion of interesting macroeconomic issues. In short, we will average about one chapter per lecture. Secondly, the reader will notice that chapters 2, 3, and 4 are missing from the course outline. These chapters contain information covered in Introduction to Microeconomics courses. As Economics 101 or 206 are prerequisites for Economics 207, I assume that students in this class understand and can apply supply and demand analysis. Further, economics is a social science that lends itself nicely to mathematical analysis. For this class, I expect students to have the ability to apply principles taught in a high school algebra class. This includes solving linear equations and working with graphs. Should you feel uncomfortable about these expectations, please do not hesitate to see me. Finally, the above outline is preliminary. Some classes move faster than others. Thus, although I give a possible day for the midterm, this is not set in stone. I will notify the class of any changes made as the quarter progresses.

Grading: There will be two midterms and a final. The midterm exams will not intentionally be cumulative (although some questions invariably rely on knowledge of previous material). The final exam will be cumulative, though heavily weighted on material yet to be tested. All three exams will cover reading materials as well as lecture notes. Absolutely no make-ups will be allowed unless a written excuse from a doctor certifying illness is presented.

Classroom discussion of topics and current economic events is highly encouraged. Although not directly computed in your grade, students who participate in class may have their final grade improved above what the numerical calculation would suggest.

Grade weights are as follows: Midterms (ea.) 30% Final Exam 40% For students that have trouble with the tests, I will substitute your final exam percentage (if it is higher) for half of your midterm exam. Thus, a final exam could count for more than 60% of a student’s grade and the midterm would count for a corresponding smaller fraction of the overall grade.

Finally, a note on grading. I grade on a curve, though this differs from what students typically think of as a curve. There is no set score that automatically results in an A, B, or C. There is also no preset percentage of letter grades. As a matter of fact, if an entire class performs well, I have no problem giving all A’s. Of course, if an entire class performs poorly, I have no problem giving many lower grades. The only set rule I have is that if you cannot score half of the highest scoring student in class, you will receive an F. Over my past thirteen years teaching at WWU, I have taught about 800 Econ 207 students. Of these students 15% have received an A, 34% a B, 42% a C, 5% a D, and 4% a F. There is no guarantee this class will have a similar distribution of grades.

Disability Services: Students with learning disabilities are encouraged to contact Student Support Services at 650-3844 if they desire testing accommodations for this class.

Classroom Dishonesty: Cheating is not a victimless crime. Grades earned through illegitimate means reduce the value of the grades earned by honest students. Students caught cheating will be failed from my course.