Lecture01 2018

advertisement
Instructor
Pengfei Wang
Lecture 1: Introduction
Professor
Of Economics
Ph.D
Macroeconomics• Pengfei Wang • 2018
1 of 32
Lecture 1: Introduction
Pengfei Wang
Ph.D. 2007 Cornell
University, Economics
Assistant Professor 20072013
M.A. 2003 Beijing
University, Economics
Associate Professor 20132016
B.A. 2000 Jilin
University, Accounting
Professor Since 2016
Macroeconomics• Pengfei Wang • 2018
2 of 21
TA for L3: Ding Dong
Lecture 1: Introduction
Office: Room5067, LSK.
Email: [email protected]
Phone: +852 65772416.
Website for teaching
materials: https://dingdonghome.weebly.com/teaching.html.
Office hours: Tuesday and Wednesday 19:00-20:00 (right
after tutorial session), or by email appointment.
Macroeconomics• Pengfei Wang • 2018
3 of 21
TA for L4: Astor Pik Lin FOK
Lecture 1: Introduction
Name: Astor Pik Lin FOK
Office: LSK 6066
Phone: 2358-7629
Email: [email protected]
Office hour: Fri 10:30-11:30pm or by appointment
Macroeconomics• Pengfei Wang • 2018
4 of 21
Text Book
Macroeconomics
(Seventh Edition)
By
Olivier Blanchard
( Professor at MIT and
Lecture 1: Introduction
chief economist at the
International Monetary
Fund )
Pearson Education
Macroeconomics• Pengfei Wang • 2018
5 of 21
Grades
3 Graded Assignments
Lecture 1: Introduction
•
•
•
Problem Sets :
Middle Term Exam :
Final Exam :
Macroeconomics• Pengfei Wang • 2018
12%
30%
58%
6 of 21
Problem Sets
•Due exactly on the time specified.
•Late problem set will NOT be accepted.
Lecture 1: Introduction
•We do NOT accept email submission of problem
set.
Macroeconomics• Pengfei Wang • 2018
7 of 21
Exams
Lecture 1: Introduction
•There is no scheduled make-up exams for Midterm
exam.
➢ If you are going to miss the midterm for
medical reason only, your final exam will count 80%
of your grade. You will need to provide a valid
medical or legal document.
•Make-up exam will only be given in the case of
illness for the final exam.
➢
Again you will need to provide a valid medical
or legal document .
Macroeconomics• Pengfei Wang • 2018
8 of 21
Course Letter Grades
Grading Curve (Suggestive)
top 20% =As , top 21%-top 60%=Bs, top 61%-top
100%=Cs, D, or F.
➢
Lecture 1: Introduction
➢Students do receive D or fail !!!
Macroeconomics• Pengfei Wang • 2018
9 of 21
Grades disputes
•You have one week to request regrade by email
once the exam is return.
Lecture 1: Introduction
•We will regrade the whole exam. So it is possible
you receive additional negative points.
Macroeconomics• Pengfei Wang • 2018
10 of 21
Academic Integrity
Lecture 1: Introduction
Academic integrity and honesty are key values at
HKUST. All students are required to uphold the
University's Academic Honor Code
(http://www.ust.hk/vpaao/integrity/honor.html).
Cheaters are subject to academic disciplinary action.
The University has zero tolerance for academic
dishonesty.
Macroeconomics• Pengfei Wang • 2018
11 of 21
Miscellaneous
•Noise/ Doors: please keep noise to a minimum if you
come late.
•Talking: If you have a question, ask me. Do not talk
to each other in class.
Lecture 1: Introduction
•Cell Phones: Make sure they are turned off or in
silent model.
Macroeconomics• Pengfei Wang • 2018
12 of 21
Rich Country’s Currency seems more
valuable
•1 Australian Dollar=5.77 HKD
•1 US dollar = 7.75 HKD
•1 Swiss Franc = 8.05 HKD
Lecture 1: Introduction
•1 Euro =9.20 HKD
•1 British Pound = 10.12 HKD
Macroeconomics• Pengfei Wang • 2018
13 of 21
An Introductory Question
Lecture 1: Introduction
GDP in 2017
US= $20.4 trillion $)
China= 82.7 Trillion Yuan (¥); 1¥ =0.15 $
Population: US=326 million; China=1,409 million
GDP per Capita: US=$62,152 ; China=$8804
Can China make its citizens richer by making 1 ¥=1
dollars???
Answer: Yes, then GDP per capita in China will be
$58693.
No: because ……
Macroeconomics• Pengfei Wang • 2018
14 of 32
Lecture 1: Introduction
What is Economics
Macroeconomics• Pengfei Wang • 2018
15 of 21
Lecture 1: Introduction
What is economics
•Why are some countries rich and some countries
poor?
•Why do women earn less than men?
•How can data help us understand the world?
•Why do we ignore information that could help us
make better decisions?
•What causes recessions?
•Why asset prices fluctuate?
•What determines income inequalities?
•Or why the female lions do most of the hunting but
the male lion eat first?
•Or Why are males bigger than females in most
vertebrate species?
Macroeconomics• Pengfei Wang • 2018
16 of 21
Lecture 1: Introduction
Macroeconomics• Pengfei Wang • 2018
17 of 21
Lecture 1: Introduction
Macroeconomics• Pengfei Wang • 2018
18 of 21
Economics
•Economics can be defined in a few different ways. It’s
the study of scarcity, the study of how people use
resources and respond to incentives, or the study of
decision-making.
Lecture 1: Introduction
•The study of individual decisions is
called microeconomics. The study of the economy
as a whole is called macroeconomics.
Macroeconomics• Pengfei Wang • 2018
19 of 21
A Tour of the World
Lecture 1: Introduction
What is macroeconomics? The best way to answer this
question is to take you on an economic tour of the
world.
The goal of this chapter is to give you a sense of these
recent events and of some of the macroeconomic
issues confronting different countries today.
Macroeconomics• Pengfei Wang • 2018
What Macroeconomics Is About
Lecture 1: Introduction
Macroeconomics studies the performance of the
entire economy and government policies that affect
economic performance.
Two main areas of research:
▪ Long-run economic growth. (Part 5: The Growth
Theory )
▪ Short-run fluctuations. (Part 2, 3, 4)
• Unemployment (Part 3 : The AS-AD model )
• Inflation (Part 3 : The AS-AD model )
• The international economy (Part 4: The Open Economy)
Macroeconomics• Pengfei Wang • 2018
21 of 21
Lecture 1: Introduction
Financial Crisis &
Macroeconomics• Pengfei Wang • 2018
22
Lecture 1: Introduction
What is Macroeconomics?
Macroeconomics• Pengfei Wang • 2018
23
Lecture 1: Introduction
What is Macroeconomics?
Macroeconomics• Pengfei Wang • 2018
24
Lecture 1: Introduction
1-1 The Crisis
From 2000 to 2007, the world economy had a sustained
expansion.
In 2007, U.S. housing prices started declining, leading
to a major financial crisis.
The financial crisis turned into a major economic crisis
with falling stock prices.
In the third quarter of 2008, U.S. output growth turned
negative and remained so in 2009.
Through the trade and financial channels, the U.S.
crisis quickly became a world crisis.
Macroeconomics• Pengfei Wang • 2018
1-1 The Crisis
Lecture 1: Introduction
Figure 1-1 Output Growth Rates for the World Economy, for
Advanced Economies, and for Emerging and Developing Economies,
2000–2014
Macroeconomics• Pengfei Wang • 2018
1-1 The Crisis
Lecture 1: Introduction
Figure 1-2 Stock prices in the United States, the Euro area, and
emerging economies, 2007–2010
Macroeconomics• Pengfei Wang • 2018
1-2 The United States
The United States is big
▪ With an output of $17.4 trillion in 2014, it accounted or 23% of
world output.
The U.S. standard of living is high
▪ Output per capita is $54,000, close to the highest in the world.
Economists also look at:
Lecture 1: Introduction
▪ Output growth
▪ Unemployment rate
▪ Inflation rate
Macroeconomics• Pengfei Wang • 2018
1-2 The United States
Lecture 1: Introduction
Figure 1-3 The United States, 2014
Macroeconomics• Pengfei Wang • 2018
1-2 The United States
The U.S. economy in 2015 was in decent shape, leaving much of
the effects of the 2008-2009 crisis behind.
Lecture 1: Introduction
Table 1-1 Growth, Unemployment, and Inflation in the United
States, 1990–2015
Macroeconomics• Pengfei Wang • 2018
1-2 The United States
The federal funds rate—the interest rate the Fed controls— went
from 2.5% in July 2007 to nearly 0% in December 2008.
Lecture 1: Introduction
Figure 1-4 The U.S. Federal Funds Rate since 2000
Macroeconomics• Pengfei Wang • 2018
1-2 The United States
Why did the Federal Funds rate stop at zero?
▪ This constraint is known as the zero lower bound.
▪ If it were negative, then everyone would hold cash rather than
bonds.
Why are low interest rates a potential issue?
Lecture 1: Introduction
▪ Low interest rates limit the Fed’s ability to respond to further
negative shocks.
▪ Low interest rates may lead to excessive risk taking by investors
to increase their returns.
Macroeconomics• Pengfei Wang • 2018
1-2 The United States
Productivity growth is important for a sustained increase in
income per person, but since 2010, it has been only about half
as it was in the 1990s.
The slowdown in productivity growth is worrisome because the
standard of living especially for the poor may not increase.
Lecture 1: Introduction
Table 1-2 Labor Productivity Growth, by Decade
Macroeconomics• Pengfei Wang • 2018
1-3 The Euro Area
The European Union (EU) is a group of 28 European
counties with a common market.
In 1999, the EU formed a common currency area called
the Euro area, which replaced national currencies in
2002 with the euro.
The Euro area faces two main issues today:
Lecture 1: Introduction
▪ How to reduce unemployment?
▪ How to function efficiently as a common currency area?
Macroeconomics• Pengfei Wang • 2018
1-3 The Euro Area
While the United States recovered from the 2008–2009 crisis,
output growth in the Euro area remained close to zero between
2010 and 2014.
In 2015, output growth was below the pre-crisis average and the
unemployment rate was 11.1%.
Lecture 1: Introduction
Table 1-3 Growth, Unemployment, and Inflation in the Euro Area,
1990–2015
Macroeconomics• Pengfei Wang • 2018
1-3 The Euro Area
Lecture 1: Introduction
Figure 1-5
The Euro area, 2014
Macroeconomics• Pengfei Wang • 2018
Lecture 1: Introduction
1-3 The Euro Area
While the average unemployment rate for the Euro
area was 11.1% in 2015, countries like Spain had
an unemployment rate of 23%.
Much of the high unemployment rate was the result
of the crisis.
Even when Spain had its lowest unemployment rate
of 9%, it was nearly twice that of the United States.
Some economists believe labor market rigidities with
too much protection for workers are the main
problem.
Macroeconomics• Pengfei Wang • 2018
1-3 The Euro Area
Lecture 1: Introduction
Figure 1-6
Unemployment in Spain since 1990
Macroeconomics• Pengfei Wang • 2018
1-3 The Euro Area
Supporters of the euro argue:
▪ economic advantages due to no more changes in exchange
rates
▪ its contribution to the creation of a large economic power
Others argue:
Lecture 1: Introduction
▪ the drawback of a common monetary policy across euro
countries
▪ the loss of the exchange rate as an adjustment instrument
within the euro area
Macroeconomics• Pengfei Wang • 2018
1-4 China
Lecture 1: Introduction
China is in the news every day.
Its population is more than four times that of the
United States.
But its output at $10.4 trillion is only about 60% of
the United States.
Output per person is roughly 15% of that of the
United States.
China has been growing very rapidly for more than
three decades.
Macroeconomics• Pengfei Wang • 2018
1-4 China
Lecture 1: Introduction
Figure 1-7 China, 2014
Macroeconomics• Pengfei Wang • 2018
1-4 China
China’s rapid output growth has been driven by high
accumulation of capital and technological progress.
The slowdown after the crisis is considered to be desirable as
more of output would go to consumption instead of
investment.
Lecture 1: Introduction
Table 1-4 Growth, unemployment and Inflation in China, 1990–2015
Macroeconomics• Pengfei Wang • 2018
Lecture 1: Introduction
Other issues such income inequalities
Macroeconomics• Pengfei Wang • 2018
43 of 21
Download
Related flashcards
Create Flashcards