EC10E and (EC14C or EC18A or M10B or M10C)


(876)512-3410

SAMB - Room 10

Mon 3-5pm, Wed 1-3pm, by Appt
ECON2002 : Intermediate Macroeconomics I

Course Description

Macroeconomics is the study of national economies and how they work. The goal of this course is to help students understand macroeconomic issues such as economic growth, unemployment, inflation and business cycle fluctuations. Concepts such as fiscal and monetary policy are introduced and explained. By the end of the course students should have a good understanding of how economies work and how to make them work better, that is, more efficiently.

Prescribed Texts
"Macroeconomics" 6th Edition (2007) by Mankiw, Gregory N. - Worth Publishers

Additional Readings

(1) Macroeconomics 9th Edition (2003) by Gordon, Robert J. - Pearson Education Inc.

(2) Macroeconomics 5th Edition (1997) by Hall, Robert E. and John B. Taylor - W.W. Norton and Company Inc.

Course Assessment

Mid-Term - 40%

Final Exam - 60%

 

Course Outline

Topics

  1. Introduction

(a)    What is Macroeconomics?

(b)   The Three Main Economic Indicators

(c)    Economic Models

(d)   The Long Run versus the Short Run

(e)    Real Business Cycle Theory versus Keynesian Macroeconomics

(f)     Macroeconomic Extremes

Readings : Mankiw – chapter 1, pgs. 2-15, chapter 9, pgs. 259-262, chapter 19, pgs. 528-529; Gordon – chapter 1, pgs. 3-23, chapter 17, pgs. 531-535, 539-542 and 545-547; Hall & Taylor – chapter 1, pgs. 3-17, pgs. 17-20

 

  1. National Income Accounting

(a)    Income, Expenditure and the Circular Flow

(b)   Computing Gross Domestic Product (GDP)

(c)    Leakages and Injections

(d)   GNP versus GDP

(e)    Nominal versus Real GDP

Readings : Mankiw – chapter 2, pgs. 16-30; Gordon – chapter 2, pgs. 25-41; Hall & Taylor – chapter 2, pgs. 25-46

 

  1. Measurement of Price Changes

(a)    Consumer Price Index (CPI)

(b)   GDP Deflator

Readings : Mankiw – chapter 2, pgs. 30-34; Gordon – chapter 2, pgs. 41-49; Hall & Taylor – chapter 2, pgs. 46-49

 

  1. Measurement of Unemployment

(a)    Definitions

(b)   Okun’s Law

Readings : Mankiw – chapter 2, pgs. 34-39 and chapter 9, pgs. 255-257; Gordon – chapter 2, pgs. 49-52; Hall & Taylor – chapter 2, pgs. 49-51

 

  1. Income Determination

(a)    Consumption Function (MPC and MPS)

(b)   Equilibrium Income

(c)    The Multiplier

Readings : Mankiw – chapter 10, pgs. 278-287; Gordon – chapter 3, pgs. 61-86; Hall & Taylor – chapter 6, pgs. 145-168

 

  1. IS-LM Model

(a)    IS Curve

(b)   LM Curve

(c)    Equilibrium

(d)   Monetary and Fiscal Policy in the IS-LM Model

Readings : Mankiw – chapter 10, pg. 288-Chapter 11, pg.313; Gordon – chapter 4 and chapter 5, pgs. 87-113, 117-133; Hall & Taylor – chapter 7, pgs. 173-196

 

  1. The AD Curve

(a)    Derivation of the AD Curve using the IS-LM Model

(b)   Monetary and Fiscal Policy and the AD Curve

Readings : Mankiw – chapter 11, pgs. 313-314; Gordon – chapter 7, pgs. 193-199; Hall & Taylor chapter 7, pgs. 196-199 and chapter 9, pg. 228

 

  1. The AS Curve

(a)    The Long Run versus the Short Run

(b)   Shocks to AD and AS

(c)    The Philips Curve

(d)   Expectations

Readings : Mankiw – chapter 9, pgs. 261-262, 265-274, and chapter 13, pgs. 374-398; Gordon – chapter 7, pgs. 199-206; Hall & Taylor – chapter 8, pgs. 205-215 and chapter 9, pgs. 231-232

 

  1. Price Adjustment

(a)    Shocks to the IS Curve

(b)   A Shock to the LM Curve

(c)    The Quantity Theory of Money

Readings : Mankiw – chapter 11, pgs. 315-326 and chapter 4, pgs.83-89; Gordon – chapter 7, pgs. 206-223; Hall & Taylor – chapter 8, pgs. 215-222, and chapter 9, pgs. 227-240

 

  1. Macroeconomic Policy Debates

(a)    Countercyclical versus Non-Countercyclical

(b)   Accommodative versus Non-Accommodative

(c)    Rule versus Discretion

Readings : Mankiw – chapter 14, pgs. 406-425; Gordon – chapter 14, pgs. 438-465; Hall & Taylor – chapter 9, pgs. 241-247

 

  1. Introduction to Long Run Economic Growth

(a)    Full Employment and Potential Output

(b)   Determinants of Economic Growth

Readings : Mankiw ______; Gordon – chapter 10, pgs. 309-313; Hall & Taylor – chapter 3, pgs. 61-70

 

  1. The Solow Growth Model

(a)    The Production Function

(b)   Savings, Investment and Capital

(c)    The Golden Rule Steady State

(d)   The Effects of Population Growth

Readings : Mankiw – chapter 7, pgs. 186-213; Gordon – chapter 10, pgs. 313-324; Hall & Taylor – chapter 3, pgs. 70-80

 

  1. Beyond the Solow Model

(a)    Balanced Growth

(b)   Convergence

(c)    Endogenous Growth Theory

            Readings : Mankiw – chapter 8, pgs. 220-224; Gordon – chapter 10, pgs. 324-327,

            329-332; Hall & Taylor – chapter 3,