Lubin School of Business
Pace University
Spring 2012
Course Information
MBA644: Macroeconomics in the Global Environment
Instructor Information
Arthur L. Centonze, Ph.D
Telephone: 212-618-6566
Email: acentonze@pace.edu
Office: W-443
Office Hours: Monday 3:00 – 5:00; Tuesday 2:00 – 5:00.
Required and Recommended Materials
Baumol, William J. and Blinder, Alan S., Macroeconomics: Principles and Policy, 12th ed., SouthWestern, 2011. ISBN: 13: 978-0-538-45365-3
Sachs, Jeffrey D., “Rethinking Macroeconomics”, Capitalism and Society, Vol. 4, Issue 3, Article 3,
2009. (Posted on Blackboard in Course Documents).
Recommended: Moss, David A., A Concise Guide to Macroeconomics, Harvard Business School Press,
2007.
Students are expected to read the assigned chapters prior to class. Class discussion will usually cover
the most challenging concepts and issues, and serve to reinforce and extend the material in the readings.
You are expected to remain current on business and economic developments by reading at least one of
the following regularly: The Wall Street Journal, The New York Times, Financial Times, or the
Economist. You are also encouraged to bring up relevant current events and issues for class discussion.
Several free literature sources are available and recommended through a number of Federal Reserve
Banks e.g., New York, Atlanta, Cleveland, Kansas City, etc., and the Levy Economic Institute at Bard
College. Check their websites for availability.
Course Description
Provides students with a basic understanding of the concepts and techniques of contemporary
macroeconomics. Topics include: global interdependence and the gains from trade; market forces of
supply and demand; supply, demand and government policies; measuring a nation’s income and cost of
living; production and growth; savings, investment and the financial systems; unemployment and its
natural rate; the monetary system; money and inflation; basic concepts of open-economy
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macroeconomics; aggregate demand and aggregate supply; and the influence of monetary and fiscal
policy on aggregate demand.
Course Overview
The course is designed to provide MBA students with the economic tools and conceptual frameworks to
better understand and analyze the causes and consequences of domestic and international
macroeconomic issues. We examine the forces driving the global integration of markets as well as the
governmental policy environment in which business operates. Students, as decision-makers, should
consider the effects of the macroeconomic environment on society at large and on business investment
decisions in particular. Both graphical and algebraic analysis is used to illustrate key points. The course
develops the analytical framework useful to the study of finance, marketing, operations and other
business subjects.
Learning Objectives
1. Master macroeconomic concepts at the national and international levels.
2. Acquire skill in applying these concepts to complex business situations in dynamic organizational
and market environments, both domestically and globally.
3. Learn to analyze domestic and international macroeconomic policy issues systematically and how
these issues influence firm decision-making.
4. Enhance your ability to research, analyze, debate, decide and communicate complex issues.
5. Enhance your ability to work successfully in teams.
Teaching/Course Methodology
This is a lecture course with some interactive work. It combines lectures with readings, class
discussions, exercises, and group presentations and reports. Questions and thoughtful comments are
encouraged in order to enliven the material and to benefit from the experience and collective insight of
the students in the class.
Students are encouraged to communicate with me through office visits, email and telephone.
Students are expected to attend each class. If you absolutely must miss a class, or be late, please inform
me in advance.
Cell phones, PDA’s, etc. should be turned off during class. Generally, laptops and tablets are not
permitted to be used in class. Students with special needs should speak to me in advance for permission
to use them in class.
Course Requirements
In addition to the readings, midterm and final exams, regular class attendance and participation, students
will complete the following three assignments. Two of the three assignments are group projects of 2-4
students. Thus, groups should form in the first class and be diverse in terms of gender, nationality and
ethnicity. Hand me a sheet of paper at the end of the first class with the full names of the group
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members clearly printed. I reserve the right to reassign students to different groups in order to enhance
group diversity.
1. Problems relevant to the material being covered in class are embedded in each week’s lecture slides.
Some of the problems we will do in class. Those we do not should be done for homework by each
student and, time permitting, we will review the solutions during the following week’s class. Your
solutions to the problems will not be collected. Solutions to the problems will be posted during the
semester on Blackboard for most of the problems. The midterm and final exams will consist largely of
very similar problems.
2. The groups will be assigned to prepare and deliver a 10 minute Group Data Report Presentation on
a recent data announcement relative to the material we are studying. The report should include a
description of the information announced, what it tells us, what is new or important in the data if
anything, and some perspective that helps your audience interpret the data. Grades for the data report
will be based on the quality of the material presented and quality of the presentation.
The schedule of data announcements and dates for the group presentations will be provided once the
groups are formed. Instructions on how to find your group’s assigned announcement, and prepare and
conduct the presentation will be posted on Blackboard. No written report is required. The data report
presentations will extend from classes 4 though 6, prior to the midterm.
Any PowerPoint slides supporting the report should be submitted to me and the other members of the
class electronically by email no later than midnight on the Sunday immediately preceding the
presentation date.
3. The groups will also prepare a Written Report on a topic selected by the group from the list of topics
provided below. Since topics are on a first come, first served basis, each group should send me their
first and second choice topics via email no later than the third class session. All group members are to
be copied on the email.
The report should address the background and issues, the relevant facts and data relative to the question
posed, and your position on the matter. It should not merely be descriptive of the issue but analytical
and interpretive in nature, e.g. emphasizing relevant data vis-à-vis economic principles and policies,
interrelationships among the data, and implications suggested by the data. Your sources should only be
academic and professional journals, or research for example from the websites of the major central
banks and economic and financial institutions around the world. No web encyclopedias (e.g. Wikipedia)
or opinion based sources (e.g. blogs) are acceptable.
A report of no more than 10 typed pages of text, plus pages for tables, charts and references is due on
the night of the last class meeting prior to the final exam.
Report Guidelines. Carefully edit the report. It should appear to be the work of a single author, i.e. it
should appear “seamless” rather than a collection of unconnected ideas and different writing styles. Use
proper vocabulary, grammar, sentence structure and punctuation. Any tables, graphs and charts should
appear in an appendix in the order in which you cite them in the report. Each table, graph and chart
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needs a number, title and source. Use standard margins, double spacing, 12 point font, APA reference
format, and include no cover pages, blank pages or binders. Submit a hard copy only.
Grades for the report will be based on the following:
- quality and depth of research from the academic and professional literature,
- quality and depth in addressing and analyzing the issues,
- quality and clarity of the report writing.
Choose one of the following topics. If you have another topic in mind, please suggest it to me as soon
as possible for authorization to proceed.
- Why is the US productivity growth rate consistently higher than in Europe?
- Is it time for a change in Euro-zone fiscal policy?
- Should the Euro-area include all the EU expansion countries?
- Why is the US unemployment rate consistently lower than in Europe?
- Is China’s current account surplus sustainable?
- What would happen if China allowed the yuan to float freely?
- Why is the large US current account deficit a concern?
- What should be the role of the International Monetary Fund (IMF) in today’s world of largely
market determined exchange rates and open capital markets?
- Should the World Trade Organization (WTO) be abolished?
Blackboard
Check the Blackboard site for this course regularly for course information, documents, assignments and
communications. PowerPoint slides for each lecture will be posted approximately 24 hours prior to each
class session.
Grading
Data report: 10%
Midterm exam: 30%
Group report: 30%
Final exam: 30%
Since it is important to integrate what you learn and be able to express it effectively, students are
expected to participate actively in class by engaging in discussions and raising relevant and thoughtful
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questions. A lack of participation can result in a diminution of grade. Multiple absences and chronic
lateness without explanations can result in a diminution of grade.
Exams are designed to assess your knowledge of economic concepts and tools, and your ability to
choose and apply them to real world issues.
You are responsible for checking the midterm exam date in the outline and avoiding any conflict with
other commitments. A student with an extraordinary situation, such as a certified serious illness, may
arrange prior to the scheduled final exam date to take a make-up final on the deferred exam date
designated by the school.
With the exception of certified serious illness, no drops or withdrawals will be approved after the last
day to officially drop a course. Please refer to the University’s academic calendar for information on
deadlines for dropping courses.
Web Support
Free sources for economic data and research articles include:
Federal Reserve Bank of St. Louis, FRED: price indexes, employment, banking, reserves, exchange
rates, interest rates, monetary aggregates, trade – www.research.stlouisfed.org/fred2
Federal Reserve Board: monetary policy, tools, and reports – www.federalreserve.gov
New York Federal Reserve Bank: monetary and foreign exchange data – www.ny.frb.org
Bureau of Labor Statistics: price indexes, earnings, unemployment, productivity – www.bls.gov
Bureau of Economic Analysis: national income and product accounts, trade, balance of payments data –
www.bea.gov
US Treasury: bond rates, yield curve rates, US economic statistics – www.treasury.gov
Economic Report of the President: US economic statistics – www.gpoaccess.gov/eop/index.html
National Bureau of Economic Research: business cycles – www.nber.org
Census Bureau: economic indicators eg. construction spending, housing starts and sales, income,
population – www.census.gov
CIA World Factbook: country data – www.cia.gov
Conference Board: consumer confidence index, leading indicators – www.conference-board.org
Economagic: data compilations from Fed, Census, BLS, Commerce, international sources (subscription
needed for advanced searches) – www.economagic.com
Wall Street Journal Markets Data Center: current and recent financial information, stocks, bonds,
commodities, futures, interest rates, foreign exchange – www.wsj.com
Academic Resources
Information on academic resources, courses, and more is available on the Lubin School’s website:
www.pace.edu/lubin. Academic advising is available through the Lubin School’s Office of Graduate
Academic Advisement and Student Development: NYC – 212-618-6440; WP – 914-422-4184.
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Academic Integrity
All members of the Pace University community are expected to behave with honesty and integrity in
order to ensure excellence in education. Students must accept the responsibility to be honest and to
respect ethical standards in meeting their academic assignments and requirements. Integrity in academic
life requires that students demonstrate intellectual and academic achievement independent of all
assistance except that authorized by the instructor. Violations include plagiarism, receiving
inappropriate assistance on assignments or examinations, or using copyrighted materials without correct
reference. Students are responsible for giving credit to any quotation, idea or data borrowed from an
outside source.
Violations of academic integrity are serious offenses. Students who fail to meet this responsibility
subject themselves to sanctions ranging from a reduction in grade to failure in the assignment or course,
to suspension, dismissal or expulsion from the University.
Students with Disabilities
The University’s commitment to equal educational opportunities for students with disabilities includes
providing reasonable accommodations for the needs of students with disabilities. To request an
accommodation for a qualifying disability, a student must self-identify and register with the Coordinator
of Disability Services for his or her campus. No one, including faculty, is authorized to evaluate the
need and arrange for an accommodation except the Coordinator of Disability Services. Moreover, no
one, including faculty, is authorized to contact the Coordinator of Disability Services on behalf of a
student. For further information, please see Information for Students with Disabilities on the
University’s website.
Course Outline (Omit text appendices except where noted)
Class 1: Macroeconomics, Scarcity, Choice, Demand and Supply
BB: Ch. 1 + Appendix, 2, 3, 4 (55 - 64)
Groups Formed
Class 2: Equilibrium, Price Rationing, and the Basic Macro Model
BB: Ch. 4 (64 - 76), 5
Moss: Ch. 1, 2 (39 - 46)
Class 3: Unemployment and Inflation
BB: Ch. 6 +Appendix
Moss: Ch. 3 (67 - 74)
Written Report Topics Due
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Class 4: Business Cycles, Economic Growth, Productivity, and National Income Accounts
BB: Ch. 7, 8 (147 - 151)
Moss: Ch. 5
Class 5: Income Determination and International Trade
BB: Ch. 8 (151 - 160) + Appendix, 9 (169 - 174), 18 + Appendix
Moss: Ch. 6
Class 6: International Monetary System
BB: Ch. 19
Moss: Ch. 7
Class 7: Midterm Exam – material from classes 1 through 6
Class 8: Expenditure Multiplier; AD, AS, and Equilibrium
BB: Ch. 9 (174 - 185), 10
Moss: Ch. 2 (54 - 55)
Class 9: Fiscal Policy
BB: Ch. 11 (213-223) + Appendix A
Moss: Ch. 3 (76 – 84)
Class 10: Supply Side Management, Phillips Curve; Introduction to Money and the Fed
BB: Ch. 11 (223-226), Ch. 12 (235 - 242), Ch. 13 (259 - 263), 17 (335 - 340)
Class 11: Banking and Monetary Policy
BB: Ch. 12 (242 - 255), 13 (263 - 271)
Moss: Ch. 2 (55 - 66), 4
Class 12: Monetary Policy in the Macro Model; Monetarism
BB: Ch. 13 (271 - 276), 15 (295 - 307)
Class 13: Monetary Policy: M vs.i; Debt and Deficits; Policy Coordination
BB: Ch. 15 (307 - 312), 16
Reports Due
Class 14: Final Exam – material from classes 8 through 13
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