University of Massachusetts
Department of Economics
Spring 2009
Instructor: Daniel MacDonald
Office: Thompson 838
Required Texts
Schiller, Bradley R. The Macro Economy Today , 11 th
ed. (McGraw Hill)
Dollars and Sense, Real World Macro , 25 th
ed. (Dollars and Sense) macdondb@gmail.com
Econ 104(H): Introduction to Macroeconomics
Lecture: MWF 9:05-9:55
Office Hours: MW 8:30-9 and 10-11 (and by appointment)
Both required texts can be found at Amherst Books in town (at the corner of Main St. and N.
Pleasant St.)
Overview
“
The master-economist must possess a rare combination of gifts. He must be mathematician, historian, statesman, philosopher–in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.”
-John Maynard Keynes
Macroeconomics is the attempt, throughout history, to understand phenomena such as unemployment , inflation , the business cycle and economic growth ; and how governments, through fiscal and monetary policy , have addressed these issues. Following the quote above, we study the issues and ideas of macroeconomics in a variety of perspectives: through the history of economic thought, economic history, philosophy, theoretical models, economic data, and politics. Each perspective has its own contribution to make to our understanding of the economy, and given that this is an introductory course intended to expose you to the variety of ideas and approaches under the heading of “macroeconomics”, it is my goal to cover all of them.
It is important to keep up with the news since there is so much talk about the economy right now.
Discussions and lectures will constantly be informed by these events, and a collection of good news sources to be found on the web is listed below. If you come across a concept or idea that doesn’t seem to make sense, feel free to mention it in class and we can talk about it. I am always free to discuss things over email as well.
Good sources of current economic news and debate:
Wall Street Journal: http://online.wsj.com/public/us
New York Times (Op-Eds and Business Section in particular): http://www.nytimes.com/
Dollars and Sense (publisher of Real World Macro): http://www.dollarsandsense.org/

Monthly Review: http://monthlyreview.org/
Prudent Bear: http://www.prudentbear.com/
Course Requirements
Class Participation: 10/100 points. You are expected to attend each lecture, and the 10 points possible you can receive here reflect this expectation. However, class participation means more than simply attendance: in addition, you will be graded on your contributions to class discussions and lectures by offering comments, asking questions and responding to my own questions.
Finally, we will occasionally have a short quiz at the beginning of class on the assigned readings.
The quizzes will not be announced.
Exams: 45/100 points. There will be a midterm (20 points) given outside of class and a final exam (25 points) during finals week. Both exams are comprehensive of all material covered previous to the exam date. (Dates and times will be announced in class as the semester progresses.)
Homework: 25/100 points. There will be 5 problem sets over the course of the semester, (2 before Spring Break and 3 after) worth 5 points each. You can use the text and notes to answer the problems but please work individually. See the final page of this syllabus for information on academic dishonesty. I take this very seriously and you will receive a zero for your assignment if
I discover evidence of cheating.
Short written response assignments and a paper: 20/100 points. There will be two short written response papers each worth 5 points and a paper worth 10 points. More information about these will be given once the semester starts.
Policy regarding late work
Your work loses 20% of its maximum possible score each day it is late. Exceptions will be given based on medical reasons or other university-related responsibilities.
Policy regarding make-up exams
No make-ups will be given except under special circumstances (e.g., more than two finals on one day, scheduling conflicts due to medical appointments or other university-related responsibilities).
Tentative Course Schedule:
All readings assigned below are required. The order of the readings generally reflects the order in which we will cover them during that particular week. Any changes will be announced in class, and a new syllabus posted on the website will reflect those changes.

Week 1: Introduction to the course and content: great economists throughout history
Schiller: chapter 1, begin chapter 2
Handouts: Adam Smith and Karl Marx
Real World Macro: 7.6
Week 2: Economic history and philosophy continued, an introduction to the circular flow diagram: a model of macroeconomic interactions, “zooming in on the circular flow: corporations”
Schiller: finish chapter 2
Schiller: pages 143-151 (beginning of chapter 8)
Real World Macro: 7.2 page 149: “The Keynes Problem”
Schiller: skim chapter 3, but note 44-45, 48-49 and 53-54
Handout on corporations
Week 3: The circular flow continued: how institutions interact in the macroeconomy,
“zooming in: labor, government”
Schiller: chapter 2, 36-39 “For Whom America Produces”
Real World Macro: 1.4
Schiller: chapter 4
Week 4: Measurement of macroeconomic performance
Schiller: chapter 5
Real World Macro: 1.1, 1.3
Week 5: Unemployment and its sources
Schiller: chapter 6
Real World Macro: 6.3, 6.5, 6.6
Bowles: 292-311
Week 6: Inflation and its consequences
Schiller: chapter 7
Real World Macro: handout from a previous edition
Week 7: Review, midterm
Week 8: Spring Break
Week 9: The business cycle, aggregate demand, and a return to the subject of instability
Schiller: finish chapter 8 (pgs. 151-163), chapter 9

Real World Macro: 3.1, 3.5
Note: given the timely nature of our study of fiscal and monetary policy, much of weeks 10 and
11 will be based on a study of policies in the US over the past 6-8 months, drawing heavily from news sources and other political analysis
Week 10: Fiscal policy
Schiller: review chapter 4
Schiller: chapters 11, 12
Handouts on fiscal policy
Week 11: Monetary Policy
Schiller: chapters 13, 14
Handouts on monetary policy
Week 12: Supply side theory: productivity, business behavior and the social consequences economic growth
Schiller: chapters 16, 17
Real World Macro: 2.1, 2.6, 2.9, 2.10
Week 13: International economics: the theory and consequences of a global economy
Schiller: chapter 20
Real World Macro: 8.1, 8.2, 8.3, 8.10
Week 14: Neoclassical macroeconomic theory and its alternatives
Schiller: chapter 19
Handouts on different economic theories
Week 15 and Week 16 (May 11): Conclusion and review
University Policy & Resources
UMass code of student conduct: http://www.umass.edu/dean_students/codeofconduct/
Academic honesty policy (including specific examples): http://www.umass.edu/dean_students/codeofconduct/acadhonesty/
Academic Regulations:

http://www.umass.edu/registrar/media/academicregs.pdf
Academic Resources
Learning Disabilities Support Services: http://www.umass.edu/ldss/
Learning Resource Center: http://www.umass.edu/lrc/
University Writing Center: http://www.umass.edu/writingcenter/index.html