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301 Macroeconomic Analysis Reference #00000 Fall 199X Class meets in Rm 000 Haag Hall at 00:00 MWF
UNIVERSITY OF MISSOURI - KANSAS CITY
COURSE SYLLABUS
ECON 301 INTERMEDIATE MACROECONOMICS
INSTRUCTOR INFORMATION
Ben Young
Phone: UMKC 235-5699
Home 962-9563
E-mail: byoung@cctr.umkc.edu
Office: 203E Geoscience Building
Please feel comfortable in contacting me at any of these addresses for any problems or questions that may arise.
This course examines the basic macroeconomic theories on the intermediate level. A careful reading of the text is required. Attendance and class participation are essential for satisfactory completion of this course.
Text:
Income, Employment, and Economic Growth, 8th ed. by Wallace C. Peterson and Paul S. Estenson
It is expected that students will be abreast of current
events by reading newspapers such as the Wall Street Journal and magazines like Business Week. The internet is an excellent source of information. We may use the internet on Saturday classes. I will be there to help anyone who is new to the internet and guide you along.
Grading:
2 Quizzes 50 points Meetings 1 and 3
2 Tests 200 points Meetings 2 and 4
2 Reports 50 points Meetings 1 and 3
Participation 100 points All meetings
Total 400 points
The tests and quizzes will largely be drawn from the discussion/problem list by chapter and films.
Report 1 is a one page outline for discussion purposes which will then be handed in for credit.
See page 57 for ideas.
Course Meetings
The class meets for four sessions on Saturdays and Sundays:
1. Saturday, 1-30, 8-4:50; Sunday, 1-31, 1-4:50
2. Saturday, 2-27, 8-4:50; Sunday, 2-28, 1-4:50
3. Saturday, 3-20, 8-4:50; Sunday, 3-21, 1-4:50
4. Saturday, 4-24, 8-4:50; Sunday, 4-25, 1-4:50
TENTATIVE OUTLINE
MEETING ONE
SATURDAY
CH-1 REPORT #1
CH-2 GDP: ITS LIMITATIONS
CH-3
_______________
CH-1 AN OVERVIEW OF MACROECONOMICS
1. WHAT ARE THE MAIN MACROECONOMIC GOALS?
2. WHAT AGGREGATES DO WE HAVE TO MEASURE THE ATTAINMENT OF THESE GOALS?
3. HOW WELL HAVE THESE GOALS BEEN MET SINCE THE 1930S?
4. WHAT PLACE DO VALUES HAVE IN ECONOMIC ANALYSIS?
5. HOW DO THE SOCIAL SCIENCES DIFFER FROM THE NATURAL SCIENCES?
CH-2 MEASURING THE ECONOMY'S PERFORMANCE
1. DRAW A CIRCULAR FLOW DIAGRAM. HOW DOES IT RELATE THE FACTOR MARKET TO THE GOODS MARKET?
2. HOW ARE THE CONCEPTS OF INCOME AND WEALTH INTERRELATED?
3. WHY MUST EX POST SAVING (S) BE EQUAL TO EX POST INVESTMENT (I)?
4. HOW DOES GNP DIFFER FROM GDP?
5. MAKE A LIST OF TEN ITEMS THAT WOULD OR WOULD NOT BE INCLUDED IN GDP (INCLUDE SOME OF BOTH TYPES).
6. WHAT IS THE GDP DEFLATOR?
7. WHAT HAVE HAPPENED TO UNEMPLOYMENT RATES SINCE WWII? HAVE THEY TENDED TO RISE OR FALL? WHY?
8. DRAW AND EXPLAIN THE PRODUCTION FUNCTION.
CH-3 THE CLASSICAL SYSTEM
1. WHAT ARE THE THREE PROPOSITIONS OF THE CLASSICAL MODEL?
2. EXPLAIN THE COMPLETE CLASSICAL SYSTEM AS DESCRIBED GRAPHICALLY IN FIGURE 3-4. IS THIS SYSTEM CAPABLE OF UNEMPLOYMENT?
3. EXPLAIN THE COMPLETE CLASSICAL MODEL OF AGGREGATE SUPPLY AND DEMAND AS DEPICTED IN FIGURE 3.8.
4. HOW WELL DID THE CLASSICAL MODEL PERFORM IN THE GREAT DEPRESSION?
MEETING ONE
SUNDAY
CH-4 QUIZ 1
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CH-4 THE KEYNESIAN SYSTEM
1. WHAT DETERMINES EQUILIBRIUM OUTPUT IN THE KEYNESIAN SYSTEM? IS THIS DIFFERENT THAN IN THE CLASSICAL SYSTEM?
2. HOW DOES THE OUTPUT LEVEL ADJUST TO THE EQUILIBRIUM LEVEL OF OUTPUT?
3. EXPLAIN THE MULTIPLIER.
4. COMPARE AND EXPLAIN THE KEYNESIAN-CLASSICAL AND CLASSICAL VIEWS OF AGGREGATE DEMAND AND AGGREGATE SUPPLY.
MEETING 2
CH-15
CH-5
CH-6 TEST 1
_______________
SATURDAY
CH-15
CH-5
CH-6 (AN OVERVIEW OF THIS CHAPTER)
_______________
CH-15 SIXTY-FIVE YEARS OF MACROECONOMIC POLICY
1. SHOULD THE FR FOCUS ON THE MONEY SUPPLY OR THE INTEREST RATE?
2. WHAT CAUSED THE GREAT DEPRESSION? WHY DID IT LAST SO LONG?
3. DISCUSS THE 1964 TAX CUT.
4. DISCUSS THE IMPORTANCE OF VIETNAM AND ITS AFTERMATH.
5. OUTLINE THE SEE SAW 1970S.
6. DISCUSS THE REAGAN REVOLUTION.
CH-5 MONEY AND INTEREST IN THE KEYNESIAN SYSTEM
1. DESCRIBE THE FUNCTIONS OF MONEY.
2. WHAT IS MEANT BY NEUTRAL AND NON NEUTRAL MONEY?
3. WHAT IS HIGH-POWERED MONEY?
4. BE ABLE TO GRAPH AND VERBALLY EXPLAIN THE LOANABLE FUNDS THEORY OF THE INTEREST RATE.
5. BE ABLE TO GRAPH AND VERBALLY EXPLAIN THE LIQUIDITY PREFERENCE THEORY OF MONEY AND INTEREST.
6. HOW ARE THE INTEREST RATE AND PLANNED INVESTMENT EXPENDITURES RELATED?
CH-6 THE IS-LM MODEL
1. BE ABLE TO CONSTRUCT THE IS CURVE AS SHOWN IN FIGURE 6-1. HOW DOES THIS EXPRESS EQUILIBRIUM IN THE GOODS SPHERE?
2. WHAT CAUSES THE IS CURVE TO SHIFT?
3. BE ABLE TO CONSTRUCT THE LM CURVE AS SHOWN IN FIGURE 6.4. HOW DOES THIS EXPRESS EQUILIBRIUM IN THE MONETARY SPHERE?
4. WHAT CAUSES THE LM CURVE TO SHIFT?
5. WHAT IS MEANT BY GENERAL EQUILIBRIUM AS ILLUSTRATED IN THE IS-LM MODEL IN FIGURE 6-6?
6. BE ABLE TO GRAPH AND EXPLAIN VERBALLY THE KEYNES AND PIGOU EFFECTS.
7. DISCUSS FISCAL AND MONETARY POLICY UTILIZING THE IS-LM FRAMEWORK(SEE FIGURE 6-14).
MEETING 2
SUNDAY
COMPLETE CH-6
TEST 1
MEETING 3
CH-7 QUIZ 2
CH-8
CH-9 REPORT #2
________________
SATURDAY
CH-7 REPORT #2
CH-8 THE US BUDGET
________________
CH-7 CONSUMPTION, SAVING, AND THE MULTIPLIER
1. KNOW THE TECHNICAL ASPECTS OF THE CONSUMPTION FUNCTION, E.G., MPC, APC, AND BE ABLE TO GRAPH AND VERBALLY EXPLAIN THEM.
2. KNOW THE TECHNICAL ASPECT OF THE SAVING FUNCTION, E.G., MPS, APS, AND BE ABLE TO GRAPH AND VERBALLY EXPLAIN THEM.
3. HOW DOES A CHANGE IN THE MPC AFFECT THE IS CURVE?
4. HOW DO THE SHORT-RUN AND SECULAR CONSUMPTION FUNCTIONS DIFFER?
5. DESCRIBE THE RELATIVE INCOME HYPOTHESIS.
6. DESCRIBE THE PERMANENT INCOME HYPOTHESIS.
7. DESCRIBE THE LIFE-CYCLE INCOME HYPOTHESIS.
CH-8 INVESTMENT AND FINANCE
1. KNOW AND EXPLAIN THE PRESENT VALUE DISCOUNT FORMULA.
2. KNOW AND EXPLAIN THE MARGINAL EFFICIENCY OF CAPITAL.
3. WHAT IS THE INVESTMENT DECISION, GIVEN THE INTEREST RATE AND THE MEC? GIVEN THE PV AND THE SUPPLY PRICE OF CAPITAL K?
4. IS INVESTMENT SPENDING SENSITIVE TO THE INTEREST RATE?
5. WHAT IS INDUCED INVESTMENT SPENDING?
6. DISCUSS THE ACCELERATION PRINCIPLE. NOTE TABLE 8-4.
7. DISCUSS SPECULATION VS. ENTERPRISE.
8. DISCUSS THE SUPPLY CURVE FOR FINANCE, FIGURE 8-6.
9. NOTE THE OTHER INFLUENCES ON THE INVESTMENT DECISIONS:
A) ROLE OF GOVERNMENT
B) ROLE OF TECHNOLOGY
C) ROLE OF MARKET STRUCTURE
MEETING 3
SUNDAY
CH-9 QUIZ 2
______________
CH-9 PUBLIC EXPENDITURES, TAXES, AND FINANCE
1. DISCUSS HOW TRANSFERS AND TAXES AFFECT INCOME AND THEREFORE CONSUMPTION EXPENDITURES.
2. DESCRIBE GOVERNMENT SPENDING AND TAXING USING THE IS-LM MODEL, FIGURE 9-8.
3. DESCRIBE THE CONCEPT OF THE FULL EMPLOYMENT BUDGET, SEE FIGURE 9-9.
4. STUDY AND BE ABLE TO DISCUSS IN CLASS TABLE 9-8.
5. WHAT ARE BUILT-IN STABILIZERS AND HOW DO THEY WORK?
6. WHAT IS THE BALANCED BUDGET THESIS?
7. DESCRIBE "CROWDING OUT."
8. DESCRIBE "MONETIZING THE DEBT."
MEETING 4
CH-10 TEST 2
CH-11
CH-12
CH-18
________________
SATURDAY
CH-10
CH-11
CH-12
________________
CH-10 INTERNATIONAL ECONOMY
1. DESCRIBE HOW THE INTERNATIONAL ECONOMY HAS CHANGED SINCE WWII(1940S).
2. BE PREPARED TO DISCUSS THE BALANCE OF PAYMENTS. ESPECIALLY THE RELATIONSHIP BETWEEN THE CURRENT ACCOUNT AND THE CAPITAL ACCOUNT.
3. WHAT IS AN EXCHANGE RATE? HOW IS IT DETERMINED?
4. DISCUSS THE THEORY OF PURCHASING POWER PARITY.
5. DRAW AND EXPLAIN THE IMPORT AND EXPORT CURVES.
6. EXPLAIN THE BALANCE OF PAYMENTS EQUATION ON PAGE 387(10-12).
7. DISCUSS THE RECENT DEVELOPMENTS IN INTERNATIONAL MACROECONOMICS(PP. 393-397).
CH-11 MONEY AND OUTPUT
1. DRAW AND EXPLAIN THE ASSET DEMAND FOR MONEY.
2. DESCRIBE IN DETAIL THE MONEY MULTIPLIER:
km'= 1 + cr
rr + cr
3. IS THE MONEY SUPPLY EXOGENOUS OR ENDOGENOUS?
4. DESCRIBE(AND GRAPH) THE MONETARY EQUILIBRIUM MODEL IN FIGURE 11-4.
5. OUTLINE THE SECTION ON THE ORIGINS OF THE MODERN QUANTITY THEORY, PP.427-431.
6. BE PREPARED TO EXPLAIN THE DIFFERENCES BETWEEN THE KEYNESIAN AND MONETARIST MODELS PRESENTED IN FIGURE 11-5.
7. BE PREPARED TO EXPLAIN IN DETAIL THE FRIEDMONIAN THEORY OF THE DEMAND FOR MONEY, PP.435-441.
8. WHAT ARE THE POLICY IMPLICATIONS OF THE MODERN QUANTITY THEORY?
9. BE GENERALLY CONVERSANT WITH THE ARGUMENTS MADE IN THE SECTION, THE OUTCOME OF THE MONETARIST CHALLENGE, PP.443-451.
CHAPTER 12 OUTPUT, EMPLOYMENT, AND INFLATION
1. DISCUSS THE PRICE HISTORY OF THE UNITED STATES.
2. WHY IS INFLATION A SERIOUS CONCERN?
3. DESCRIBE THE KEYNESIAN THEORY OF PRICE LEVELS.
4. BE ABLE TO DRAW AND EXPLAIN A PHILLIPS CURVE.
5. WHAT IS THE ACCELERATIONIST THESIS?
6. WHAT IS AN INCOMES POLICY?
7. HAVE INCOMES POLICIES BEEN SUCCESSFUL?
MEETING 4
SUNDAY
CH-18 TEST 2
_______________
CH-18 POST KEYNESIAN ECONOMICS
1. WHAT ARE THE FUNDAMENTAL CONCERNS OF POST KEYNESIANS?
2. DISCUSS MINSKY'S FINANCIAL INSTABILITY HYPOTHESIS.
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