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.