Macroeconomics

Syllabus Proposal
Economics: Macroeconomics
Avi Ifergan Contact Details:
ifergan@012.net.il or
0523 58 40 18 I welcome you to contact me on my cell phone any day of the week (except
Shabbat), no later than 10pm. The only thing that I ask is that you don't
say: "I apologize for contacting you at home / on the weekend" - there is
no apology necessary!
I am connected via e-mail 24 hours a day, six days a week at home and I
will be glad to answer your queries or messages. Please do not hesitate to
contact me - I welcome your interest or questions regarding my class. Attendance: Three-strike policy - absence from more than 25 percent of the
classes for each semester results in automatic failure. If you arrive late
to the class, it is your responsibility to let me know at the end of class
so that I can check off your name. Participation: Your quality participation and input in this class is both
valued and essential! I expect you to devote your full attention to the
lecture and discussions in this class, which means that reading other
materials, playing on a palm pilot or conducting private conversations
during class is not acceptable. The open and free-flow of ideas and debate
is encouraged, in a respectful manner (This means not interrupting one
another and listening to each other's ideas). Finally, students are not to
begin closing books or making other preparations to leave class until the
class is dismissed. It is expected that each student will have prepared for each day's class by
completing the daily reading(s) and/or outside-class assignment(s). Assessment:
Class Attendance 10 %
3 in-class Mini-exams 30 %
Exam 60 % The course text is: PRINCIPLES OF ECONOMICS, N. Gregory Mankiw. third edition
South-Western Publishers
WEEK 1 February 13, 2006 MEASURING A NATION'S INCOME? - Defining Macroeconomics, and the difference between microeconomics
- Understanding GDP, its components and how it is measured
- Real and Nominal GDP and calculating the GDP deflator Chapter 23 WEEK 2 February 20, 2006 MEASURING THE COST OF LIVING - Inflation, the Consumer Price Index and how they are calculated
- Problems in measuring the Cost of Living
- Substitution Bias, Introduction of new goods and unmeasured quality
changes
- Producer Price Index
- Differences between the GDP Deflator and the CPI
- Calculating Dollar amounts from different periods
- Real and Nominal Interest Rates Chapter 24
WEEK 3 February 27, 2006 UNEMPLOYMENT - Categories of Unemployment
- Measuring Unemployment
- Calculating the Unemployment Rate and Labor Force Participation Rate
- Public Policy and Job Search
- The Minimum Wage, Unions and Colelctive Bargaining
- Theory of Efficiency Wages Chapter 28 WEEK 4 March 6, 2006
THE MONETARY SYSTEM - The Meaning of Money and its functions
- M1 & M2
- The Federal Reserve System
- Banks and the Money Supply
- Reserve Ratios and the Money Multiplier
- Tools of Monetary Control Chapter 29 Mini-Exam#1 20 Multiple Choice Questions on Chapters 23,24,28 (10%) WEEK 5 March 13, 2006 MONEY GROWTH AND INFLATION
- The Classic Theory of Inflation
- Hyperinflation and deflation
- Money Supply, Demands and Equilibrium
- The Quantity Theory of Money
- The Velocity of Money
- Inflation Tax
- Fisher Effect
- Shoeleather costs and Menu costs Chapter 30 WEEK 6 March 20, 2006 OPEN ECONOMY MACROECONOMICS: BASIC CONCEPTS - The difference between Open and Closed Economies
- Exports, Imports and Net Exports
- Net Capital Outflow
- Savings, Investments and the relationship to International Flows
- Nominal & Real Exchange Rates
- Purchasing Power Parity Theory and Arbitrage Chapter 31 WEEK 7 March 27, 2006 MACROECONOMIC THEORY OF THE OPEN ECONOMY - The difference between Open and Closed Economies
- The Market for Loanable Funds
- Real Equilibrium in an Open Economy
- The Effect of Tariffs and Import Quotas on the Exchange rate
- The Effects of Capital Flight Chapter 32 Mini-Exam#2 20 Multiple Choice Questions on Chapters 29,30,31 (10%) Pesach Break March 30 - April 23 WEEK 8 April 24, 2006 AGGREGATE DEMAND & AGGREGATE SUPPLY - Recessions, Depressions
- The basic model of aggregate demand and aggregate supply
- The Wealth Effect, The Interest Rate Effect, The Exchange Rate Effect
- Misperceptions Theory, Sticky-Wage Theory, Sticky-Price Theory
- Stagflation
- Policy Responses to Recession
Chapter 33
WEEK 9 May 1, 2006 THE INFLUENCE OF MONETARY AND FISCAL POLICY
ON AGGREGATE DEMAND - The Theory of Liquidity Preference
- The Crowding and Multiplier Effect
- Automatic Stabilizers Chapter 34 WEEK 10 May 8, 2006 THE SHORT-TERM TRADEOFF BETWEEN INFLATION & UNEMPLOYMENT - The Phillips Curve
- Expectations and the Short-run Phillips Curve
- Natural Rate Hypothesis
- The role of supply shocks
- The cost of reducing inflation and the Sacrifice Ration
- The Volcker Disinflation and the Greenspan Era Chapter 35 Mini-Exam#3 - 20 Multiple Choice Questions on Chapters 32,33,34 (10%) May 15 - No Classes WEEK 11 May 22, 2006 PRODUCTION & GROWTH - The factors of production
- The production function
- Government policies that raise productivity and living standards
- The Importance of savings and investments
- Diminishing Returns and the Catch-Up Effect
- Education and the Brain-Drain Chapter 25 WEEK 12 May 29, 2006 CURRENT ISSUES IN MACROECONOMICS 1. Should monetary and fiscal policymakers try to stabilize the economy?
2. Should monetary policy be made by rule rather than by discretion?
3. Should the central bank aim for zero inflation?
4. Should the government balance its budget?
5. Should the tax laws be reformed to encourage saving? Chapter 36