ECON 364 Intermediate Macroeconomic Theory
Fort Lewis College – Winter 2005
Section 1 (10374)
Time: TTH 10:10-12:10
Location of Class: EBH 108
INSTRUCTOR INFORMATION
Instructor’s Name: Dr. Deborah Walker
Office Location: EBH 194
Telephone Number: 247-7624
E-mail address: walker_d@fortlewis.edu
Web Page address: http://soba.fortlewis.edu/walker (This is an important address -- all class handouts, homework assignments, study questions, etc. will be posted on this web site. It is your responsibility to download them).
Office Hours: MW 12:30-2:00, TR 2:30-3:30 and by appointment. If the days/times of my office hours are not convenient for you, please make an appointment with me for another time and/or day.
NOTE: The only time that I request you do not stop by my office is during the 10 minutes prior to any of my classes starting. PLEASE do not come see me during those times - thanks!
Introduction: Macroeconomics studies the behavior of an economy as a whole (although many economists believe that “micro foundations” are behind economy-wide movements). Basically, macroeconomics concerns itself with issues of economic growth (total output of goods and services), unemployment, inflation, and balance of payments. However, it is correct to say that macroeconomic theory is in a state of disarray. Unlike the period from the General Theory, in the mid-1930s, until the early 1970s, when there was “an” orthodox view based on the conventional Keynesian model, today no consensus exists. Instead, a number of competing theories coexist. The purpose of this course is to examine these theories in more depth than is the case in a principles course, and to consider the policy implications of each. I would also like to make this course as application oriented as possible. The following theories are analyzed, compared, and contrasted: Classical, Keynesian, Neoclassical Synthesis, Monetarist, Supply-Side, New Classical I & II (Rational Expectations and Real Business Cycles), Neo-(or New) Keynesian, Post Keynesian, and Austrian Business Cycles. We will also cover the workings of the FED (monetary policy) in depth.
Prerequisites: Econ 266 - Principles of Economics
Required Readings:
Class handouts (handed out in class and/or posted on my web page). Also check your e-mail regularly, as I will e-mail articles to you from the WSJ and other places.
The Wall Street Journal - if you do not have a subscription, now is a good time to get one. I will pass around a sign up sheet for you to order it for a student discount (60% off) - $32 for 15 weeks. Or you can go to WSJstudent.com.
Course Learning Objectives : Students completing this course successfully will be able to explain, in depth:
· The Classical theory and its implications for government policy;
· The Keynesian theory and its implication for government policy;
· The Neoclassical Synthesis and its implications for government policy;
· The Monetarist theory and its implication for government policy;
· The Supply-Side theory and its implication for government policy;
· The New Classical I (Rational Expectations) theory and its implication for government policy;
· The New Classical II (Real Business Cycles) theory and its implication for government policy;
· The Neo-(or New) Keynesian theory and its implication for government policy;
· The Post Keynesian theory and its implication for government policy;
· The Austrian theory and its implication for government policy;
· Students will also be able to compare and contrast the aforementioned theories and their implications
for governmental policies.
· Students will also have an in depth understanding of how monetary policy is carried out by the FED.
COURSE POLICIES:
Attendance Policy: I will not take attendance. However, it is my opinion that those students who attend class on a regular basis learn a great deal more than those who do not and I will notice if you are not in class on a regular basis. Some of your grade will be based on class participation (mostly attitude). If you have not attended class on a regular basis, I will take that into consideration when I am determining your final grade. And lastly, a good set of notes is necessary in my class to get a good grade -- all exams will be based on what we cover in class as well as the assigned readings.
Specifically: Thirty points or approximately 5% of your grade is based upon your attitude and your attendance.
Attitude problems include, but are not limited to, consistently coming into class late, interrupting class by talking while the instructor or a fellow student is speaking, reading or writing material that is not related to the class, and leaving class early without notifying the instructor beforehand.
ALSO: coming into class late is, in my opinion, very rude and disruptive to class. A few minutes late a couple of times per semester is understandable -- but coming into class late on a regular basis will not be acceptable -- your class participation grade will suffer if you do so. Get to class on time. Leaving (and returning) in the middle of the class will also be considered rude and distributive and will cause your class participation grade to suffer. If you must leave early for some reason let me know at the beginning of class. I want to create a classroom atmosphere that is conducive to learning – respect for your fellow classmates and for the professor is necessary for this to be achieved.
Grading Policy:
Your semester grade will be determined as follows: (approximately 735 points total)
40% - Exams (3 at 15% or 100 points each = 300 points)
24% - Written homework assignments (175 points -- this point total is approximate) - this includes three WSJ analyses
18% - Writing Assignment - Economic Impact Study, Economic Data Study or Policy Paper (130 points)
04% - Class participation, mostly attitude, attendance, etc. – (30 points)
14% - Final Exam (100 points)
Approximate Total Points Possible: 735 points (tentative) possible for the class. I will grade on a curve. The person with the highest number of points in the class will set the curve. For example, if the highest number of points earned in this class is 550 points out of 735, any student with 90% of 550 points (495 points and above) will receive an A in the class; any student with 80% of 550 points will receive a B in the class; and so on.
Exams: There will be three exams and a final. These exams will include multiple choice questions (approximately 1/3 of the point total), essay questions and graphs (approximately 2/3 of the point total). Test material will come from class handouts and from class notes (most important).
NOTE: once an exam has been handed out in class, you are not allowed to leave the classroom for any reason. If you come into an exam late and someone has already finished the exam and left the classroom, you will not be allowed to take the exam and will be given the grade of zero for that exam. The final exam is not comprehensive (it will cover the material we go over after the third exam). However, much of the material we cover late in the semester builds upon material discussed earlier.
Note:
“But my Mom made the plane reservations and I can’t change them” is
not a valid excuse to take the final exam early.
YOU MUST TAKE THE FINAL EXAM DURING ITS SCHEDULED DAY AND TIME.
Make-Up Exams: I will not give make-up exams. If you talk to me BEFORE an exam is given and have a valid excuse for missing it, then you can possibly make up the missed points on the final exam (depending upon the reason for missing the exam – I typically require verifiable documentation of your reason).
EXAM DATES:
First Exam - Tuesday, Feb. 1
Second Exam - Thursday, Feb. 24
Third Exam - Tuesday, March 29
Final Exam - Monday, April 25, 12:00-2:00
Reading Assignments: I will expect you to keep up with any assigned readings. The class will include discussions about the handouts I will put on my web page or hand out in class or articles from the WSJ -- therefore, if you have not read the assigned reading, you will not be able to participate in the discussions and will not gain as much from the lectures. I reserve the right to give a pop quiz whenever I feel the majority of the class is not keeping up with the assignments.
Homework Assignments: Students will be given written assignments to complete and turn in throughout the semester. I will announce these assignments and their due dates during the course of the semester. The purpose of these assignments will be to further students understanding of the topics and issues discussed in class. In particular, these assignments are designed to enhance student exposure to and understanding of classroom material. General directions for all assignments are as follows:
I DO NOT ACCEPT HOMEWORK VIA E-MAIL -- YOU MUST TURN YOUR HOMEWORK IN AT THE BEGINNING OF CLASS. IF YOU PLAN TO MISS CLASS, YOU MUST TURN IT IN PRIOR TO CLASS.
· All assignments must be turned in at the beginning of class on the day they are due.
· Late assignments will be accepted with a deduction in points (20% if turned in the same day, 30% thereafter).
· No late assignments will be accepted once the assignment has been returned to the class.
· All assignments should be typed and stapled. Number calculations and graphs do not have to be typed.
WSJ Analyses:
Throughout the course of the semester, choose three WSJ articles (that I do not choose to discuss in class) that directly relate the economic theory we are discussing class. Write a 1-2 page analysis of the article -- particularly, relate the article to the class material (theory). Which school of thought does the article follow, if any? Tell me why you find the article interesting. Do not simply restate what the article already says. Staple the article to your written analysis. Each analysis is worth 25 points, for a total of 75 points.
Extra Credit Opportunity (Optional): For 4 extra credit points (12 total if you share all three), share your analysis with the class during one of our Thursday WSJ discussion periods (about 5 minutes or so).
Writing Project Assignment: Since this class is a "W" class, with writing credit, each students will be required to do a project ending with a written report or to write a macroeconomic policy paper.
Option One: Economic Analysis Project - There are several projects that you can work on that involve collecting data in the local economy, analyzing that data, and then writing a report on it. Some of these projects are larger than others -- so some will require more than one person to work on it. These are the projects that I am aware of now:
1. Develop an economic index for Montezuma County (similar to the Econometer, the index for the La Plata County). 3-4 people
2. Do an economic impact study of the Arts in La Plata County. 1-2 people
3. Do an economic impact study of Day Care in La Plata County. 2-3 people
4. Develop an economic profile of those people moving into La Plata County. 1-2 people
5. Develop a consumer and producer price index for La Plata County and/or Durango. 2-3 people
6. Do an economic impact of the tourist industry in La Plata County. 3-4 people (good for tourism majors)
7. Develop an economic freedom index for La Plata County (relative to other counties nearby). 1-2 people
8. Do an economic impact study of the Durango Film Festival. 1-2 people
Option Two: Policy Paper - The paper can be on any macroeconomic topic discussed in class. A policy paper is not a research paper per se. Some research will be required but basically I would like to you write about a topic from your own point of view. Remember, your audience included non-economists -- so make sure you explain your arguments carefully and don't use economic jargon that you don't define. Examples are always a good way to explain theories. The public seems to have a romance with numbers, so if there are empirical studies that back up your story, use and cite them.
You will be graded on the thoroughness of your analysis, whether your analysis is logical and follows from your basic assumptions and the written presentation. Depending upon which type of study you are working on, I will give you a prototype to follow. The length of the study will depend upon the type of analysis you do.
Topic Suggestions:
1. Compare and contrast two schools of thought on the topic of "tax cuts and economic growth" and then explain why you agree with one school over another.
2. Compare and contrast two schools of thought on the topic of having a large government debt, or if the debt is considered good, what should the government spend money on and why? Or might simply explain why some economists view a large government debt as bad for economic growth.
3. Explain what economic growth is and what factors might help or hinder it.
4. Write an essay on the basic differences between economists: those who believe in Say's law vs. those who don't and the policy implications that follow.
You will be graded on the strength of your arguments, whether your analysis is logical and follows from your basic assumptions. Therefore, your paper should include:
a statement of the issue or question you are writing about (what you are trying to accomplish in the paper),
any assumptions you are making,
background information if appropriate,
your analysis of the issue (this should be the longest section in your paper),
summary and conclusions,
a list of references.
Your paper should be between 1100-1300 words (not including any graphs or charts you want to include). Please use 12 point font and double space. You should include footnotes or endnotes and complete citations to any references you use (including web page references).
A few outstanding papers/projects will be chosen to be published in a local publication: The Econometer - which is distributed to the local business community.
Extra Credit Opportunity (Optional): You will have the option of presenting your project or paper to the class for 10 extra credit points. Don't simply read your paper or project summary, tell the class what you wrote about and talk about your analysis and conclusions. Your presentation should not last more than 10 minutes followed by questions/discussion. We will leave time the last week of class (depending upon how many people want to do it). Please let me know if you want to or not - but no rush.
Your decision regarding your project/paper is DUE THURSDAY, JANUARY 20.
Economic Analysis Project or Policy Paper Due Date: Thursday, April 21.
Withdrawals: The deadline to drop this course without record is Tuesday, Jan. 25. After that date you will receive the grade of F or W – depending upon the circumstances of the withdrawal. In general, if you are passing the class at the time of the withdrawal and your purpose for withdrawing is reasonable, I will give you a W in the class.
Accommodations for Disabilities: If you need course adaptation or accommodations because of a disability (physical, learning, psychiatric, vision, hearing, etc.), or have emergency medical information to share, please notify me by the end of the second week of classes. Documentation of the disability may be required before special accommodations will be given.
Academic Integrity/Honesty Statement: If I believe an exam or homework assignment has been compromised, I reserve the right to retest (or reassign the homework to) the whole class or any individual in the class. “Cheating” includes, but is not limited to: possession of, or use of, unauthorized materials during exams and providing (or receiving) information to another student either through oral or written (including both via paper and electronic means) communication. This includes passing unauthorized information via computer disk. Plagiarizing someone’s work is also a very serious violation of academic integrity. Violations of any of the above may result in academic penalties, including receiving an “F” in this course. Cheating is highly unethical and I will not tolerate it!