ECONOMICS 3012 INTERMEDIATE MACROECONOMIC THEORY Course Outline J ALLEN Spring 2008 SUBJECT READING ASSIGNMENT WEEK BEGIN Introduction Ch 1 Measurement and Definitions Ch 2: 2.1,2.3 Ch 3: 3-1 Allen Notes I P1; SG: Ch3: 1a,1c Jan 7 Goods Markets: (45 line model) Ch 3: 3-2,3-3,3-5 Allen Notes II(A) P2; SG: Ch3: 6,7 Jan 14 The Government Budget Ch 3: Prob 6 Allen Notes II(B) P3 Jan 21 Financial Markets Ch 4: 4-1,4-2 SG: Ch4: 6,8,9,10 Jan 28 Goods and Financial Interact: IS and LM Ch 5 & Probs 3&4 Allen Notes II(C) P4; SG: Ch5: 1,2,3,7,9,10,12 Feb 4 Jan 7 Policy and Review Feb 11 MIDTERM EXAM Feb 25 Open Economy I: Foreign Sector, Exchange Rates Ch 6 P5; Allen Notes IV(A&B) SG: Ch6: 1,2,5,6,10 Mar 3 Open Economy II: New IS and new LM Ch7: 7-1 to 7-4 Allen Notes IV(C) SG, Ch6: 11,12,13,17; Mar 10 Open Economy II (continued) Ch 8: 8-1 – 8-4 P6; SG: Ch7: 1,2; Ch8: 3,4, 6,9. Mar 17 Prices and Output I: AD Ch 10: 10.2 Allen Notes II(D) P7 SG: Ch10:4,5 Mar 24 Prices and Output II: AS Ch 9, Ch 10: 10-1 P8; SG: Ch10:2,4,5 Mar 31 Prices and Output III: AD&AS Ch 10, 10-3 to end Allen Notes III P9; SSEx SG: Ch10:9,11,12 Apr 7 econ 3012 course outline page 2 READINGS: All readings except my Notes are from Macroeconomics, Third Canadian Edition, by Olivier Blanchard and David Johnson. My Notes will be posted on the class website. You can download them from there. I like a lot of things in this textbook, but it does one thing I don’t like at all. With the exception of Chapter 3, it presents the analysis in general mathematical form in the main text. This means all analysis must use only graphs. This is done (probably) because many of the relations are curvilinear. But the Problems at the end of chapters, and in the Study Guide, use linear approximations to the curves. The latter are extremely useful since they allow everything to be done with algebra. Thus, at times, I have assigned a Problem in the text as part of the reading. This is because the algebra of the linear approximations is given in those Problems. We build a model in this class, derived from a more fundamental model: the IS/LM model. This may be the only course you take in economics, and will probably be the only course you take in university, where you will formally build models. Since model building is what modern economics, especially modern macro-economics, is all about, it is extremely valuable for you to see how this can be done, with mathematics you understand. In this case the mathematics is simple high-school algebra. So in my notes I will give you all the basics of the algebraic models. I will also note problems in the text which contain the algebra. YOU WILL BE REPSONSIBLE FOR KNOWING ALL MODELS IN BOTH GRAPHICAL AND ALGEBRAIC FORMS! ASSIGNMENTS: There are three types of assignments. The first type is Problems (P) that will be posted on the class website. These are not to be handed in; answers to these will be posted on the class website. The second type is REVIEW PROBLEMS from the Study Guide (SG) that accompanies the textbook. These are not to be handed in; answers to these are in the back of the Study Guide. The third type is the one Spread Sheet Exercise using EXCEL (SSEx), and this is to be handed in for credit. You learn this type of material by doing it, not by watching me do it! While the Problems are not to be handed in, if you don’t do them you will do poorly on the exams. So it is up to you; work on the Problems and do well on the exams, or don’t work on them and do poorly. MARKS: There will be a Midterm Exam and a Final Exam. Each is worth 48% of your final mark. The SpreadSheet Exercise is worth 4% of your final mark. GRADES: My grading scheme is: 90-100=A+; 80-89.9=A; 70-79.9=B; 60-69.9=C; 50-59.9-D; below 50=F. EXAMS: The exams are a combination of Problems and Short-Answer Questions. The Midterm Exam is scheduled for the week of February 25, the week after Reading Week. There will be an exam on Tuesday, which will be Problems; and an exam on Thursday, which will be Short-Answer Questions. I will give a review on the Thursday of the week before Reading Week. The final exam will be in the regularly scheduled period, which is tentatively Monday, April 21, at 9:00 am. THE CLASS E-MAIL LIST: All of you are on the class e-mail list. If I, or anyone else, sends an emessage to this list, all of you will get that message. If you “reply” to something on that list, it will go only to the person who sent it. My e-mail address is “allenj@uleth.ca”. If you want to send a message just to me, send it to my personal address. MISCELLANEOUS: My office is C-582, and my office hours are Monday and Wednesday, from 2:00 to 3:30. If these are inconvenient, you can make an appointment to see me, either by e-mail or by catching me after class.