ECONOMICS 304–1 INTERMEDIATE MACROECONOMIC
THEORY – Spring 2015
Instructor - Robert B. Archibald
Office - Morton 101B
Phone - 221-2366
E-Mail - rbarch@wm.edu
Textbooks: Macroeconomics 6th Edition by Olivier Blanchard and David R. Johnson
(Prentice Hall, 2013)
COURSE DESCRIPTION
The Course – Economics 304 covers all the basic topics in macroeconomics – the
determination of national output, inflation, unemployment, and exchange rates. This is
the second course in macroeconomics. I will assume that everyone has had Economics
102 or its equivalent. I will, however, not assume that every detail of Economics 102 is
available for quick recall. With that in mind, the first part of the course will briefly
review some topics from 102. Thereafter we will start building much more sophisticated
models of the economy. Don’t be lulled to sleep by the repeat nature of the first few
lectures. We will get to new material in short order.
How to Study - In most instances, theories will be described three ways: verbally,
mathematically, and graphically. The only way to fully understand macroeconomics,
particularly the mathematics and the graphs, is to practice manipulating the models. This
means that study should be active. Reading the book, taking notes, and reviewing the
book and notes will not be enough. Many students have told me, “Professor Archibald, it
all sounds so reasonable when you say it or when I read it in the book, but when it comes
to having to answer a question I get it all wrong.” I think these students are victims of
passive studying strategies. To really understand a macroeconomic model, one has to take
a pencil and draw the graphs and/or work through the equations. The textbook has a
good set of end of the chapter problems. Students should try these problems. I will post
additional problems on Blackboard, and I will post the answers to these problems after
you have had a chance to work them.
Design of Classes – For the most part this class will be a lecture class, but many
classes will start with a brief discussion of what we have learned about the aggregate
economy lately. Students should read a newspaper or monitor a website that keeps them
up to date on what is going on in the US economy. There will some other opportunities
for discussion, but these opportunities will be limited. Nevertheless questions are
encouraged at all times. In-class questions will not be graded. There is no such thing as
a bad question. It is more important to ask inarticulate questions than it is to ask
articulate ones (if you can’t be articulate, you are really lost.) Do not worry about
interrupting the class with your question. Let me be the judge. If it would be better to
deal with your question at some other time, we will do so.
COURSE OUTLINE
DATE
TOPIC
January 21
Introduction
January 23
Economic Indicators - GDP
2
January 26
GDP and Unemployment
2
January 28
Inflation
2
January 30
Goods Market I
3
February 2
Goods Market II
3
February 4
Financial Markets I
4
February 6
Financial Markets II
4
February 9
IS-LM I
5
February 11 IS-LM II
5
February 13
5
IS-LM III
READING
1 and Appendix 1
February 16 EXAM I
February 18
Labor Markets I
6
February 20
Labor Markets II
6
February 23
AD-AS Model I
7
February 25
AD-AS Model II
7
February 27
Phillips Curves
8
March 2
The Crisis I
First Take-Home Quiz due
9
March 4
The Crisis II
9
March 6
Growth I
10
Spring Break
March 16
Growth II
11
March 18
Growth III
12
March 20
Technological Progress
13
March 23
Expectations
Second Take-Home Quiz due
14
March 25
Financial Markets Again I
15
March 27
Financial Markets Again II
15
March 30
Output Markets Again
16
April 1
No Class
April 3
Expectations and Policy
April 6
Review for Exam II
April 8
Exam II
April 10
Open Economy I
18
April 13
Open Economy and Goods Market
19
April 15
Open Economy IS-LM 1
20
April 17
Open Economy IS-LM II
20
April 20
Exchange Rate Regimes I
21
April 22
Exchange Rate Regimes II
21
April 24
Policy I
Third Take-Home Quiz due
22
April 27
Fiscal Policy
23
April 29
Monetary Policy
24
May 1
Review
17
May 11 Final Exam (9:00 – 12:00)
Grades: Grades will be based on the two in-class exams (75 points for the first and 100
points for the second), 75 points for the three take home quizzes, and the final exam (200
points). As a result 38.9% of the grade will be based on in-class exams, 16.7% will be
based on the take-home quizzes, and 44.4% will be based on the final exam.