Syracuse University
Department of Economics
J. David Richardson
Winter-Spring 01-02
602-01.des.doc
Economics 602, Section 001
Survey of Macroeconomic Theory
Intermediate Macroeconomics
for Master's and Professional Degree Students
Course Description
Brief Description
This is a course in intermediate macroeconomics. It is meant to follow an introductory
course in macroeconomics, often a course called "Principles of (Macro) Economics."
You may realize that microeconomics is the study of decision-making by various types of
agents under various constraints and in various environments. Macroeconomics is the study of
the “typical” environments in which such microeconomic decisionmaking occurs. It examines
how these environments vary over long and short time intervals, how their variation depends on
variation in macroeconomic environments abroad, and how they respond to home and foreign
(macroeconomic) policy.
“Typical” in this characterization means average. Average (measured by an arithmetic
mean) implies the summation of activity by all the microeconomic agents in an economy, then
division by the number of such agents in existence. Summation implies that macroeconomics
deals in “aggregates” – summed-up measures. And measurement makes macroeconomics more
empirical (data-intensive) than microeconomics.
Participant Profile
This section of 602 is aimed at Master's-level students in professional programs,
especially in International Relations. M.A. students in Economics do not usually take this
course, but one or two are doing so this semester because of our department’s failure to fill an
open position last year. They will have more work to do than other students and will be graded
on a separate curve. More detail will be available at a later time. Undergraduates are not
expected to be taking this course; to do so requires special reasons (talk to me) and approval of a
special petition to the economics department.
Official auditors are welcome, but must do all assignments and exams. The university
tries to discourage unofficial auditors, and if you choose to sit in anyway and unofficially, I hope
you will understand that I do not want you to take up class time with questions, nor to ask me
subsequently to testify that you sat in on the course.
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Longer Description: Content, Style, Philosophy, Purpose
This is a course in intermediate macroeconomics -- and more. It is aimed at deeply
understanding applied intermediate macroeconomics in cross-national settings. By deep
understanding I mean that I will be working to make you capable of interpreting, evaluating,
and verbally articulating forecasts of macroeconomic performance in both the long and short
runs. By applied I mean that I will be working to make you capable of making such forecasts
yourself, and that the macroeconomics we will study will have, as best I can accomplish it, realworld correspondence. By intermediate I mean that I am pre-supposing that you have had at
least one course in economics principles. By cross-national settings, I mean that I will bend
over backwards to translate our text's illustrations into world-wide counterparts, and will try to
develop supplementary case studies of macroeconomic environments in global environments.
We will, for example, finish the course with an intensive case study of Japanese macroeconomics
over the past 15 years.
Because of these specific objectives, the course content will have some distinctive
emphases. We will devote considerable time to long-run macroeconomics – the
macroeconomics of growth and development – though we will of course also cover short-run
macroeconomics in detail – the macroeconomics of stabilization. We will focus less than normal
on theories of consumption and less on US institutions of fiscal and monetary policy. We will
focus more than normal on capital formation (both domestic and foreign investment), on exports
and imports, on government and international debt management and country risk premiums, and
on exchange rates and exchange-rate policies (e.g., currency boards, crawling pegs, sterilized and
unsterilized intervention), as well as on conventional monetary and fiscal policies. The course
will also be more case-dependent than normal courses and more conscious of the need to
persuade. But it will not be purposely less rigorous.
It is important to say, therefore, in a musical metaphor, that this is not an "economics
appreciation" course; it is a course in performing and composing (doing) economics, and in
adjudicating the day-to-day tryouts among economists. In microeconomics, the principal
instruments to master are logic and analysis, often (but by no means exclusively) channeled
through graphs and algebra. That’s also true of macroeconomics, but macroeconomists “play”
empirical data more often than microeconomists because of the importance of measurement in
macro. Also, macroeconomists are more concerned with the overall impetus and impression of
the woodwinds or brass or strings together, as well as crescendos and decrescendos, when many
orchestras are playing together -- microeconomists are more typically concerned with techniques
for playing each instrument well. The tone of all these instruments is technical, but I will not
argue that they should take over the orchestra. I do not believe that everything in creation is
orchestrated by economics, nor that the world would harmonize better if it were. I do believe
that economics instruments are under-represented in the world's orchestra, and often played
poorly, so that their popularity among critical audiences is low. We will be trying to change that.
Finally, economics is more than music. I am convinced that it is an important framework
for describing and interpreting a real and pervasive set of phenomena in every culture and time.
That is why I will always be trying hard to illustrate how this music really matters.
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Foundations and Prerequisites.
The prerequisite for this course is an introductory course in macroeconomics -- principles
of (macro)economics ideally. Most one-semester and two-semester undergraduate courses will
satisfy this prerequisite. But those who have had courses at the high-school level only, or courses
long ago, may find them inadequate as prerequisites. At Syracuse University, Economics 102
fills the prerequisite ideally, Economics 203 somewhat less well, and Economics 101,
Introductory Microeconomics, even less well.
I expect students to be numerate -- able to read and interpret graphs and tables and to
solve simple algebraic and numeric problems. Please do not continue with the course if you are
feel yourself unable to master the reading or assignments in the first few weeks.
Grading System: Assignments, Exams, Participation.
Grades will be based on 111 points worth of assignments, exams, and participation, for
all students, as follows:
Assignments -- 24 points (3 points each on the 8 assignments to be handed in; 3 can be
skipped; I will select your top 8 grades when more than 8 are handed in).
Exams – 75 points.
First Midterm Exam, Thursday, January 31 -- 12 percent.
Second Midterm Exam, Thursday, February 21 -- 15 percent.
Third Midterm Exam, Thursday, April 4 -- 27 percent.
Final Exam, date to be determined -- 21 percent, with chances to increase
grades from earlier exams.
Participation -- 12 points.
Everyone-has-a-bad-day scaling. At the end of the course I will ignore the lowest 11
points of your various grades. This is, of course, to your benefit, but understand also how that
motivates the very strict policies on late assignments and makeups, described below.
Assignments will be weekly (except during the week of the midterm exams) and will
contain questions of several types: written assignments based on in-text exercises and end-ofchapter problems from the textbook, assignments devised from other readings, including The
Economist, and supplementary exercises from time to time. Assignments will typically be made
available as attachments to emails sent out from me Thursday or Friday of the week before they
are due.
Exams will be very much like assignments, involving problem-solving of the kind
represented in the textbook and lectures. A week before each required exam, a large set of
questions will be distributed to you from which most of the exam will be drawn. You are free to
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work together on answering these before the exam itself (see below, Independent and Joint
Work). During the exam period you will be asked to re-draft answers to a sub-set of the larger
set. All but at most one question/problem (out of 3 or 4) on each exam will come from the larger
set. The one question you have not seen may be a brief battery of multiple choice questions.
Participation grades will have roughly the same mean across the class as grades on
assignments and exams. Participation involves a variety of activities. Taking initiative to
advance your own knowledge is the most important thing. It might involve asking questions, in
and after class, or over email, and in office visits. It might involve discussions of supplementary
material that you see on any of our themes, say newspaper clips or web discussions, or brief
written reactions that you have to course content. It might involve following up with me on my
own reactions to your written assignments, telling me why you may disagree with my
assessments, and then hearing my response.
Late Assignments. Assignments are always due at the very beginning of Tuesday’s
class. Those handed in after the class begins will lose 10 percent of the grade, and continue to
lose 10 percent for every subsequent 24 hour period that they are late.
Makeups. There will be no makeup exam for any of the three midterms. Unavoidable
circumstances, including sickness, are covered adequately by the "everyone-has-a-bad-day
scaling" above, and by the chance to be "re-examined" to some degree, if you desire, on the final
exam. There will be a makeup for the final exam, if necessary, at a time to be arranged, possibly
as late as the beginning of Fall 2002 semester. Approval of make-up privileges for the final
exam is not automatic; you must contact me in this regard as early and directly as possible.
Independent and Joint Work. On assignments I expect independent work and will
probe and penalize work that has been done on behalf of someone else. On exam questions, you
are welcome to work jointly on answers to the large set of questions handed out before each
exam, but of course you will re-draft your answers independently to the smaller set during the
exam period. Beware that (for many reasons) joint study groups that are too large or too diverse
tend to become satisfied with an answer that represents only the average performance of the
members of the group, not the best.
Note, please: under no circumstances will term papers be a supplement to or substitute
for the arrangements above.
Richardson: Office, Office Hours, Other Modes of Contact
347 Eggers Hall, Tel. 443-4339 (please leave a message on voice mail if necessary), FAX
to Global Affairs: 443-9085.
Monday, 1:30-2:45 p.m.
Tuesday, 2:30-3:45 p.m.
Wednesday, 2:30-3:45 p.m.
Other times by special arrangement.
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Email address: jdrichar@maxwell.syr.edu
Text and Readings
The textbook for this course is N. Gregory Mankiw’s Macroeconomics, fourth edition,
New York: Worth, 2000. Also required is Adam S. Posen’s Restoring Japan’s Economic
Growth, Washington, DC: Institute for International Economics, 1998 (an analytic and evaluative
case study of recent macroeconomic trends and policymaking in Japan). Both are available from
Follett’s Orange Bookstore in the Marshall Square Mall, and only from there.
Handouts of newsclips and articles will be frequent in this course, and are considered part
of assigned reading unless otherwise stated in class. If you miss a class, make sure to ask me for
the handouts you missed; not all can be labeled sequentially.
In addition, The Economist magazine will provide a large number of illustrations of the
microeconomics that we are trying to master, and I encourage you to subscribe. The illustrations
will be assigned reading, and will be recorded cumulatively through the course on a
supplementary reading list that I will be updating weekly for you, via email. I will be providing
reduced-price 15-week subscriptions for $25 per student. Further details are on a related
handout.
Compliance with Section 504 of the Rehabilitation Act of 1973
Students who may need special consideration because of any sort of disability should
make an appointment to see me.
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