INTERMEDIATE MACROECONOMICS ECO 4203 Fall 2009

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1 1 Basic Information INTERMEDIATE MACROECONOMICS ECO 4203 Fall 2009 Professor: Don Schlagenhauf O ce: 277 Bellamy Hall Class Time: 11:00-12:15, T-Th Room: Bellamy 204 O ce Hours: 9:30-10:30, T-Th and by prior appointment Phone: dschlage@fsu.edu 2 Course Objectives The objective of this course is to provide a simple, but rigorous framework for understanding and analyzing macroeconomic events, their causes, and their consequences. The course will introduce you to modern macroeconomics. The focus is on how consumers and rms respond to outside events such as a credit crisis or a governments policy change. Thus, the course will have a strong microeconomic avor. We will not use calculus, but will use graphs and algebra. It is hoped that the material taught will provide you with a crucial understanding of macroeconomics that will be of use when making decisions. At the end of the class you should be able to analyze and make some sense of issues like the current US macroeconomic situation, the current status of US scal and monetary policy, the impact of international events on the US economy as well as the ability to understand and critically read newspaper articles about the economy. While calculus is not used, the course is very analytical and uses mathematical reasoning. Some students will nd the course easy, while other students will nd the course hard. Students will have to work on the material outside of class. Thus, you should expect to spend a signi cant amount of time working on the material outside of the class. Some of the questions you should be able to answer by the end of the class are: What causes sustained growth and can growth continue inde nitely? Why are some countries rich and other countries poor? Is there anything that a government can or should do to alter the rate of economic growth? What causes business cycles? 1

2 Should governments smooth business cycles? Why does the FED target the nominal interest rate? What is Bernanke trying to do with monetary policy when the interest rate is near zero? Will we have a L-shaped recession? Should more regulation be imposed on the nancial sector in the US? 3 Grading The course grade will be based on exams, class room discussion, and homework. Four exams will be given including the nal exam. Each exam is worth 25 percent of your nal grade. The last exam will be comprehensive. The exams will be a combination of multiple choice questions, short answer questions, and applied problems that stress the application and concepts taught in lecture. No makeup exams will be given for any reason. Homework will be graded. The points earned on the homework will be used as bonus for the relevant exam. Classroom performance will be considered at the margin. The exam grade distribution is as follows: Letter Grade Range A A B B B C C D F 50-below 4 Schedule The tentative schedule for exams is: Exam Date First Thursday, Sept 24 Second Thursday, Oct. 22 Third Thursday, Nov. 19 Fourth Thursday, 12/9(Wed.) 12:30-2:30 2

3 The homework due dates are: Homework Date Homework #1 Sept. 8 Homework #2 Sept. 22 Homework #3 Oct. 7 Homework #4 Oct 21 Homework #5 Nov 17 Homework #6 Dec. 3 Homework is to be handed in at the start of the class on the date due. Once homework is collected, any other homework will be considered late and will not be accepted. I will also have review classed prior to each exam. The room and time of the review classes will be announced in class. The time will be around 5:00 p.m. The tenative schedule is: 5 Text Event Date First Exam Review 9/23 Second Exam Review 10/21 Third Exam Review 11/16 Fourth Exam Review TBA S. Williamson, Macroeconomics, Addison-Wesley, latest edition. 6 Course Outline 6.1 Measurement and Performance in Macroeconomics A. Measurement of Output and Prices Williamson, Chs B. Measurement of Business Cycle Williamson, Ch Economic Growth 1. Williamson, Ch. 6, Ch. 7( ) 2. Robert E. Lucas, Jr. "The Industrial Revolution: Past and Future," Annual Report of the Federal Reserve Bank of Minneapolis, ( 3

4 6.3 Basic Models A. Some Basic Microeconomic Concepts Williamson, Ch B. A Simple Dynamic Model- The Two Period Model Williamson, Ch. 8 ( ) C. Dynamic Fiscal Policy Williamson, Ch. 8 ( ) 6.4 The Basic Business Cycle Model and Policy Implications A. A Real Intertemporal Model (with investment) Williamson, Ch B. A Monetary Real Business Cycle Model Williamson, Ch. 10, Ch. 15( ) C. The Neo-Keynesian Business Cycle Model Williamson, Ch Current Macroeconomic Policy Issues A. Money, In ation, and Banking Williamson, Ch B. In ation, The Phillips Curve and Central Bank Commitment Williamson, Ch Cheating and Honor Code Students are expected to uphold the Academic Honor Code. The Academic Honor System of the Florida State University is based on the premise that each student has the responsibility to: 1. Uphold the highest standards of academic integrity in the students own work, 4

5 2. Refuse to tolerate violations of academic integrity in University community, and 3. Foster a high sense of integrity and social responsibility on the part of the University community. Anyone caught cheating or facilitating dishonesty in any form will be appropriately penalized. 8 ADA Requirements Students with disabilities needing academic accommodations should: 1. Register with and provide documentation to the Student Disability Resource Center (SDRC) 2. Bring a letter to the instructor from SDRC indicating your need for academic accommodations. This should be done within the rst week of class. For more information about services available to FSU students with disabilities, contact the Assistant Dean of Students: sdre@admin.fsu.edu, Disabled Students Services. 08 Kellum Hall, Florida State University, Tallahassee, Fl , (850)