Econ 201
Principles of Macroeconomics
Professor Alex Binder
UMKC, Fall 2012
Office: Royall Hall 410B
Office Hours: MF 11-12, W 1-2, or by appointment.
Email address: adbmn5@mail.umkc.edu
Class Meetings
Classes meet on Monday, Wednesday, and Friday from 10:00-10:50am in Education Room 117.
Texts & Readings
Required
McConnell, Brue, and Flynn (MBF). Macroeconomics, 18th Edition. McGraw-Hill, 2008.
ISBN 978-0073365947
Gluckman, Miller, Snyder (GMS). Real World Macro, 27th Edition. Dollars & Sense, 2010.
ISBN 978-1878585998
Optional
McConnell, Brue, and Flynn (Study). Study Guide for use with Macroeconomics, 18th Edition.
McGraw-Hill, 2008. ISBN 978-0073368849
MBF and GMS are required texts for this course. Readings from GMS offer an alternative view to the
orthodox views provided in MBF. Other readings may be posted on blackboard throughout the semester at
blackboard.umkc.edu. The optional study guide is for your benefit in preparing for exams. We will also be
discussing current economic events throughout the semester so it will be a good idea to keep up with a
newspaper and/or news website as well as a few economics blogs.
Course Description & Course Objectives
On February 20, 2004, Ben Bernanke, the Chairman of the Federal Reserve Bank of the United States,
announced the arrival of ‘The Great Moderation’. Bernanke proclaimed the end of volatile business cycles
that had been characteristic of the economy since the dawn of capitalism. Just four years later, a financial
crisis struck the heart of his proclamation and depressed economies throughout the world. Housing prices,
the stock market, and profits all plummeted, while unemployment, income inequality, and poverty
skyrocketed. Banks were bailed out to prevent what we were told would be an even worse crisis and an
economic stimulus was passed in the United States to boost spending and growth. Economists at the NBER
announced the end of the recession in June of 2009, but unemployment remains high and many economies
around the world are still struggling. Profits and stock markets have rebounded, but wages and employment
opportunities remain low. Governments growing worried about ballooning government debt have cut back
to avoid what they fear would cause another crisis. Policy prescriptions come raining in from all directions.
Some say we should cut the debt by raising taxes on the wealthy; others say we should lower taxes, close
loopholes, and cut government programs drastically, still others say that the original stimulus wasn’t enough
and that more is needed.
What do President Obama and Mitt Romney and other presidential candidates plan to do should they be
elected this fall? What are the policy options facing economic policymakers? How are these options
influenced by political ideology? What policies are most likely to be successful in the modern world
according to professional economists (as opposed to politicians)? Can the US government really go
bankrupt? How did the NBER determine that we are no longer in a recession even though it looks and feels
like we are still in recession?
This course will provide a comprehensive introduction to the social science of economics with an emphasis
on macroeconomic problems. It will acquaint you with the prevailing economic theories used by today’s
economists and policy makers. You will learn to use and apply those theories, as well as to understand their
limitations and shortcomings. We will discuss a number of alternative economic theories and perspectives,
with the ultimate goal being to increase your awareness and understanding of economic issues, to improve
your ability to evaluate various policy options, and to help you decipher political-economic rhetoric. The
overall purpose of this course is to acquaint you with basic principles of economic analysis and to engage in
a substantive critical analysis of our current global economic system.
More specifically, by the end of this course, students should be able to:
o Apply economic tools/models to analyze macroeconomic problems;
o Appraise the strengths and limitations of economic models and proposed policies;
o Engage family, friends, and even strangers in intelligent discussion about economic problems and
policies;
o Critically evaluate the views that economists and politicians from several different paradigms hold with
respect to key macroeconomic problems; and,
o Describe and analyze the major macroeconomic problems confronting contemporary society, and
critically evaluate potential solutions to those problems.
A General Note About This Class
Economics is a subject that comes easily to some students but is difficult for others. Economic logic and
analysis is often hard to grasp, and can only be mastered through perseverance and practice. To facilitate
the learning of economics, it is necessary to keep up with readings, work on problem sets, and participate
actively in discussions. Forming groups to work on homework or study for exams is strongly encouraged.
Each new section in this course builds on previous sections, so it is extremely important that you do not fall
behind. In general, if you keep up with the course material, you will do well in this course. If you miss
classes and assignments and fall behind on your readings, you will do poorly.
Grading
Exam 1
Exam 2
Final Exam
Quizzes/Homework
Participation and Professionalism
Buckaroos
20%
20%
25%
20%
15%
5%
Research on student learning shows that students learn and retain more if they work regularly to master
material and if their work culminates in major assignments that require intensive study and integration of
material. Correspondingly, the course is structured so that you have regular homework assignments and
quizzes that will help you acquire the knowledge and expertise you need to be successful on the exams.
Exams (65%): There will be three examinations. Each exam will make use of multiple choice questions,
true/false questions, matching problems, fill-in-the-blank, short answer/analytical problems, and a critical
analysis essay. The Final exam is comprehensive with an emphasis in later material.
Quizzes/Homework (20%): There will be weekly homework assignments (due on Fridays) and a short quiz
most Mondays. (See schedule below). The homework assignments are designed to help you learn and
practice the material that you need to know to be successful on the exams. All late assignments will receive
a zero. Quizzes are designed to ensure that you are reading the texts and understanding the material in
2
preparation for the exams. Quizzes can only be taken during the class they’re scheduled for and cannot be
made up due to an absence or late arrival.
Class Participation, Attendance and Professionalism (15%): Class attendance is required. You are
expected to come to every class and to participate actively in class discussion on a regular basis. You are
also expected to engage in professional behavior at all times. This includes meeting deadlines, listening
respectfully to others, and ensuring that you do not disrupt the classroom environment. In class, please
make sure that your cell phone is switched off and your laptop is only used for course-related work. Texting
in class is prohibited. Also, please avoid leaving the classroom in the middle of class unless it is an
emergency – this can be very distracting for other students and your professor. The professor must be
notified ahead of time of any planned absences and notified as soon as possible of any emergency absences.
Unexcused absences will result in a lower participation grade. Missed exams must be taken ahead of the
scheduled date; quizzes can only be taken during the class they’re scheduled. I will assign each of you a
grade for each day of class and will give each of you a ‘progress report’ sometime around midterm.
Buckaroos (5%): Buckaroos are the currency issued by the Central Bank of the UMKC Economics
Department. Buckaroos are earned through completing community service. Each hour of community service
completed earns you one buckaroo. I have implemented a tax of five buckaroos on you for five percent of
your grade for this course. You must turn in five buckaroos to me on the day of the final exam to extinguish
your tax liability and receive your 5% credit. To obtain the buckaroos, fill out the form (link below) and turn
it in to our Central Banker Brian Werner (Royall 408G) who will then issue your buckaroos. You may earn
more than the required buckaroos and give/sell them to your classmates. This is all meant to teach you how
sovereign currency issuers operate. Form: http://cas.umkc.edu/econ/_resources/buckaroo_form(WS08).doc
Extra credit policy: Opportunities for extra credit will likely arise throughout the semester. You will be
notified of the guidelines and details as they arise.
All items will be graded on the following scale:
A: 93-100, A-: 90-92, B+: 87-89, B: 83-86, B-: 80-82, C+: 77-79, C: 73-76, C-: 70-72, D: 60-69, F: 0-59.
Statement on Academic Integrity
Do not, under any circumstances, cheat, copy, or plagiarize work directly from another student or from any
other source. Any violation of UMKC’s policies on academic responsibility will result in a zero for that
grade and possibly suspension or expulsion. You should familiarize yourself with UMKC’s policies on
student conduct found here: http://www.umkc.edu/catalog/Student_Conduct.html and here:
http://www.umkc.edu/catalog/Rules_of_Procedures_in_Student_Conduct_Matters.html.
Course Calendar
Date
20-Aug
22-Aug
24-Aug
27-Aug
29-Aug
31-Aug
3-Sep
5-Sep
7-Sep
10-Sep
12-Sep
14-Sep
Coursework
Intro/Syllabus
hw due
Quiz #1
hw due
No Class
hw due
Quiz #2
hw due
Lesson
Syllabus
What is economics?
Economic history
History of economic thought
World Systems
Competing paradigms
No Class
What does US economy look like?
Demand
Demand/Supply
Supply
Integrated analysis of S&D
3
Other Details
Labor Day
17-Sep
19-Sep
21-Sep
24-Sep
26-Sep
28-Sep
1-Oct
3-Oct
5-Oct
8-Oct
10-Oct
12-Oct
15-Oct
17-Oct
19-Oct
22-Oct
24-Oct
26-Oct
29-Oct
31-Oct
2-Nov
5-Nov
7-Nov
9-Nov
12-Nov
14-Nov
16-Nov
19-Nov
21-Nov
23-Nov
26-Nov
28-Nov
30-Nov
3-Dec
5-Dec
7-Dec
11-Dec
18-Dec
Quiz #3
Exam #1
Rvw Exam #1
hw due
Quiz #4
hw due
Quiz #5
hw due
Quiz #6
hw due
Quiz #7
Exam #2
Rvw Exam #2
hw due
Quiz #8
hw due
Quiz #9
hw due
No Class
No Class
No Class
Quiz #10
hw due
Quiz #11
No Class
Final Exam at
8am
Grades Due at
5pm
Integrated analysis of S&D
Integrated analysis of S&D
Exam
Exam review
Intro to Macro
Measuring GDP
Cycles, growth, unemployment
Cycles, growth, unemployment
Consumption
Investment & Saving
Investment & Saving
Imports and Exports
Imports and Exports
Imports and Exports
Government
Government
Government
Exam
Exam review
AS/AD, Keynesian Cross
Presidential Policies
Money & Inflation
Money & Inflation
Money & Inflation
Money & Inflation
Money & Inflation
Money & Inflation
No Class
No Class
No Class
Other issues
Other issues
Other issues
Other issues
Review
No Class
Note: This schedule is subject to change.
4
Last day for drop w/o 'W'
Last Day to withdraw with 'W'
Thanksgiving Break
Thanksgiving Break
Thanksgiving Break
CAS Reading day