First class, and Chapter 1
Link to syllabus
Course Arrangements
Roll – class list
Office Hours
Grade: Exams, curve, extra credit
Syllabus
E-mail list server
M.T.’s homepage for syllabus, old exams, and lecture notes in
.pptx or .docx format. Also on C-Tools and CANVAS.
Textbook, study guide, tutors
Math pre-requisite. Good to read newspaper
Different interests of students, by majors.
People who’ve had 202. Freshmen.
Bring pencil and calculator to exams – no scantrons.
Note: Econ 201 is Macro at UMD.
. Different at UM-AA
Characteristics of this course:
1. Moves quickly, hitting main points of text,
frequent efforts at relating to current events
2. Will use PowerPoint presentations. Advisable to bring textbook
to class; try to skim it beforehand. Bring a tape recorder if
you like. TURN OFF CELLULARS!!
3. Anything in the text is fair game on exams. Virtually
nothing from outside the text on exams. Not much math,
but lots of graphs.
4. After each exam, students will be asked if the exam
was fair, and if it repaid studying. Graded exams returned
the next class day (hopefully).
5. Some effort to use the web; syllabus, extra credit, and
previous exams on my webpage, and listserver for the class
6. Some parts of text omitted from this course.
Definitions of Economics
Study of production, distribution, and consumption of goods and services
Efficient use of limited resources to achieve maximum satisfaction of
human wants.
Differences between macro and micro
Positive (value free) vs. Normative (reflects values of the speaker) [p 37-8]
Overview of Macro:
Overview of Macro: study of factors determining unemployment and infla
Producers—respond to wages, price of oil, technology, capital
stock, regulations, taxes.
Purchasers (consumers)—respond to business investment, government
spending and taxes, foreign trade, and monetary policy.
[or, buyers and sellers]
Unemployment Rate, US
Source: US Dept. of Labor http://data.bls.gov/timeseries/LNS14000000
Inflation in the U.S.
Source: Bureau of Labor Statistics:
http://data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=CU_cpibrief
Main Macroeconomic issues for this course:
Government intervention:
Left/right; liberal/conservative; interventionist/free market
(laissez faire)
Democrat/Republican
Government Deficit (and the National Debt)
Depression of the 1930s. Current Crisis (2009)
Globalization: tariffs or free trade, migration, exchange rates
Supply Side Economics—lower taxes, reduce government regulation
Monetary issues, relating to the Federal Reserve Banks, and finance
Very little on the stock markets.
Adam Smith: (1723-1790) Prominent Scottish Philosopher.
The Wealth of Nations 1776
In a free market society,
individuals, acting out of their own
self interest, will be guided, as if by
an invisible hand, to make socially
beneficial economic decisions.
Discussed on page 2.
Also: benefits of free trade, criticism of
mercantilism. Discussed in chapter 2
David Malthus, 1766-1834
1798 Essay on the Principle
of Population
Overpopulation; economics
as “the dismal science”
Incidentally, Malthus’s ideas had
a big impact on Charles Darwin.
John Stuart Mill, 1806-1873
Perhaps better known as a philosopher,
he made important contributions to
economics, as well, among which are
the theory of Infant Industry Tariffs,
which we do in chapter 5.
His father was the head of the East
India Co., and he was given an elite,
rather isolated childhood education.
He was an early promoter of rights for
women, which many attribute to
the influence of his wife.
Karl Marx, 1818-1883
Communist Manifesto,
Worked with Engels on
Das Kapital
Criticized capitalism.
Class exploitation
Revolution, led by the
workers
John Maynard Keynes
(1883-1946).
Keynes
General Theory (1936)
Argued that unemployment
during 1930s Depression
could be cured by gov’t.
spending and deficits
Milton Friedman,
1912-2006
Most prominent advocate of
a return to free market/nongovernmental policies.
Influence concretized under
President Reagan.
Also: leading ‘monetarist’ and
a Nobel Prize winner.
Link to Friedman’s bio http://www.hoover.org/bios/friedman
Extra Reading:
Many economists first got interested in this field
by reading
The Worldly Philosophers,
by Robert Heilbroner.
US Inflation