Intermediate Macroeconomic Theory Assignments
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Swedish Central Bank's Memorial Nobel
Prize in Economics, 2002 Nobel Prize, 2003 Nobel Prize, 2004 Nobel Prize, 2005 Nobel Prize, 2006
Week 15
December 4, 2006:
Chapter 11: Interest
Parity and Chapter 12: Modern Keynesian Theory with RE
The New
Classical Hypothesis, pp. 316 -323 - Review
Wage
and Price Flexibility
Self-Interest
and Rational Forecasts
Anticipating
the Fed
Policy
Ineffectiveness Proposition
Chapter
12: Long Term Contracts and Evidence, pp. 341-352
December 6, 2006: Chapter 12: Long Term Contracts, Evidence,
Wage Indexation and on! Mt. Slesse
Chapter
12: Long Term Contracts and Evidence, pp. 341-352
Wage Indexation pp. 353 - 360
What have the NEW theories taught us? pp. 396-400
December 8, 2006: REVIEW FOR THE FINAL EXAM - FREE QUIZ!
Week 16
December 11, 2006: FINAL EXAM at 3 pm
Week 14
November
27, 2006: Chapter 10: Keynesian and Monetarists continued
- The Phillips Curve and the Keynesian Model, pp. 285-290
- The Monetarist Critique: The Phillips Curve and Business Cycles, p. 291-3
- Stagflation, pp. 294-6
- The more recent Phillips curve, pp. 297-302
November
29, 2006: Chapter 10: Keynesian and Monetarists continued
December 1, 2006: Chapter 11: Rational Expectations
Adaptive
Expectations, p. 311 - 314
Rational
Expectations, p. 314 - 316
The New
Classical Hypothesis, pp. 316 -323
Wage
and Price Flexibility
Self-Interest
and Rational Forecasts
Anticipating
the Fed
Policy
Ineffectiveness Proposition
Week 13a
November
20, 2006: Chapter 10: Keynesian and Monetarists continued
- The Sticky Wage Labor Market, pp. 274-7
- Imperfect Information and AS, pp. 277-280
- Real Output Determination, pp. 280-1
- Fiscal Policy and Monetary Policy in the AS-AD Framework, pp. 281-5
November
22, 2006: THANKSGIVING BREAK!
November
24, 2006: THANKSGIVING BREAK!
Week 13
November 13, 2006 Chapter 9 - Finish - TEST IIIb DUE!
- Go over Test IIIa - corrections!
- Monetary and Fiscal Policy under Floating Exchange Rates, p. 258-63
November 15, 2006 Chapter 10 - Keynesian and Monetarist Views on
Price and Output Determination
- For Friday find out what an Economist believes the CPI numbers
mean (yes, find a blog and highlight their thoughts). 5 pts
- Economics Blogs
- Macroblog
revisited
- Monetary Policy in the Open Economy Revisited - Sterilization
- Quiz - review Test IIIb
- Chapter 10: Aggregate Demand, now we add in the price level!
- The Equation of Exchange Revisited (p. 68)
November
17, 2006 Chapter 10 - Keynesian and Monetarist Views on Price and Output
Determination
- Milton Friedman - See the h: drive for further details
- Chapter 10: Aggregate Demand, now we add in the price level!
- Monetary Policy - LM and AD, p. 270
- Fiscal Policy - IS and AD, p. 272
- Aggregate Supply - sticky nominal wages, pp. 274-7
- The Sticky Wage Labor Market, pp. 274-7
Week 12
November 6, 2006 Chapter 9 - Balance of Payments
- Chapter 9:
- Balance of Payments and the IS-LM, pp. 237 - 242
- The BP Schedule, p. 240
- "BoP" Deficits and Surpluses, p. 240
- High versus Low Capital Mobility - The Slope (elasticity) of the BP curve, pp. 242-249
- Test IIIa - Chapters 7 - 8 Handed out (60 pts) DUE FRIDAY!
November 8, 2006 Chapter 9 - BoP continued
- High versus Low Capital Mobility - The Slope (elasticity) of the BP curve, pp. 242-249
- Currency Appreciations and Depreciations, pp. 247-8
- Test IIIb - Chapter 9 Handed out (20 pts) - Due Monday
November 10, 2006 Chapter 9 - BoP continued - Test IIIa - Chapters 7 -
8 DUE
Week 11
October 30, 2006 Chapter 8 - Elasticities
- Chapter 8 continued:
- The Real Balance Effect
- Interest-Inelastic Money Demand
- Interest-Elastic Money Demand
- Elasticity of the IS Schedule
November 1, 2006 Chapter 7 - Bequests and Begin Discussion of
Aggregate Demand
- Chapter 7 continued:
- Ricardian Equivalence: Can Tax Policy Matter?
- Bequests and Intergenerational Transfers
- Is the logic of the Ricardian Equivalence Proposition Inescapable?
- Keynesian Monetary Policy Transition Mechanism
- First link: Liquidity Effect
- Second link: The Investment Response
November
3, 2006: Chapter 9: Exchange Rates and the Balance of Trade
- For Monday find an Economics Blog resource that
discusses the Unemployment rate change on Friday. Print, highlight and
comment. 5 pts
- Please note that the blogs have not been
previewed or analyzed so view at your own discretion. Bring any suggestions to me,
please.
- Keynesian Monetary Policy Transition Mechanism
- First link: Liquidity Effect
- Second link: The Investment Response
- Crowding Out Effect
- Liquidity Trap and the case of Japan
- Chapter 9:
- Balance of Payments, internal balance and external balance
Week 10
October 23, 2006 Quiz after the test and Chapter 7 - Laffer and Bequests
- Chapter 7 continued:
- The Laffer Curve
October 25, 2006 Discuss the LM Curve and an introduction to Ricardian
Equivalence
- The Laffer Curve - See the h: drive for two articles
- Chapter 7 continued:
- Ricardian Equivalence: Can Tax Policy Matter?
- Chapter 8 continued:
- Factors that affect the LM Schedule
- The Liquidity Effect of Monetary Policy
- The Real Balance Effect
October 27, 2006: In Lieu of Class, Answer the following questions
for 10 points (DUE Monday at the beginning of class):
What
did the Federal Open Market Committee decide on Wednesday (at 2:15 EDT) and why?
I want
two printouts of sources that you used in your two paragraph summary.
One
source needs to be a "news" article and the other an "opinion" of an
economist. (Yes, a blog is alright.)
Week 9
October 16, 2006 FALL BREAK - ENJOY!
October 18, 2006 REVIEW FOR THE TEST AND MAKE-UP CLASS
- Review for the Test
- The effects of Monetary Policy
- Changes in the Federal Budget
- Equal increases/decreases in spending and taxes
October 20, 2006 TEST 2: Chapters 5, 6, 7 (excluding Laffer curve
and Ricardian Equivalence) and 8 (basic money market and LM)
Week 8
October 9, 2006 Chapter 7: Fiscal Policy continued
- National Income and the Balance of Trade, Chapter 6
- Chapter 7: Inflationary and Recessionary Gaps - Countercyclical Fiscal Policy
- Do cuts in Income Tax Rates Necessarily Reduce Tax Revenues?
- Automatic stabilizers
October 11, 2006 Chapter 8: Money in the Traditional Keynesian System
- Chapter 8: pp. 219-224 - Deriving the IS Schedule
- The Demand for money - three motives
- The Supply of money and the equilibrium nominal interest rate
- The LM Schedule - derivation
October 13, 2006 Chapter 8: Money continued - Problem Set 1 Due
- Equilibrium interest rate and national income
- The effects of Fiscal Policy
Week 7
October 2, 2006 Chapter 6: Essentials of the Keynesian System
- Business Cycles - Natural GDP, Recessions and Troughs
- Unemployment: Frictional, Structural and Cyclical: The Natural Rate of Unemployment
- Keynes' Critique of the Classical Theory
- Potential Shortsightedness
- The Circular Flow
- Value of Income must equal the value of output
- Household Consumption and Saving - the Keynesian system
- Marginal propensity to consume and save
- The import function
- The saving function
October 4, 2006 Chapter 6: Essentials of the Keynesian System
- The consumption function and saving function
- Investment Spending by firms, Gov't Spending and taxation
- Aggregate Expenditures and the Multiplier Effect
- Autonomous Expenditures
October 6, 2006 Finish Chapter 6 and Begin Chapter 7: Fiscal Policy
- National Income and the Balance of Trade
- Chapter 7
- The Income Tax system and automatic stabilizers
- Adapting the Keynesian Model to an income tax
- Problem Set 1 handed out, due October 13.
Week 6
September 25, 2006 Chapter 5: Economic Growth
- Problems with per capita GDP measures
- Why Growth matters
- Great Economic Growth Slowdown
- Determinants of Economic Growth
- Employment growth
- Capital growth
- Growth of Productivity of Labor and Capital
September 27, 2006 Economic Growth continued
- Short "study" due - Is life better or isn't is? (10 pts) Word Process
with the usual 1 page constraints.
- The GRAPHS!!!
September 29, 2006 Economic Growth continued
- Capital Investment, Saving and Growth
- The GRAPHS!!!
- Does Capital crowd out Labor?
- Knowledge, innovation and human capital
Week 5
September 18, 2006 Review and finish Chapter 4
- The Law of One Price versus Purchasing Power Parity
- The Big Mac Index
- What to expect on the Exam on Wednesday
- For the Test on Wednesday: Read the article on the front page of Monday's Wall
Street Journal entitled "As U.S. Debates Guest Workers, They Are Here Now".
Explain how a Classical Economist would view these events: Summarize the article
briefly in a paragraph (as it applies to Classical Economic Theory). Then explain
how the labor market, the real wage, production, aggregate supply and demand, the price
level and real output will be affected. At the minimum, use a production function
graph and an Aggregate Supply and Demand graph in your explanation. 20
points Word process and double space the answers (except any graphing) in
12pt Times New Roman font with 1" borders (all four sides).
September 20, 2006 Exam I: Chapters 1 - 4
September 22, 2006 Go over the exam and make corrections - quiz
time!
Week 4
September 11, 2006 Fiscal Policies
- What's up with the declining saving rate? (p. 81)
- Investment and the Demand for Loanable Funds
- Government Deficits and the Real Interest Rate
- Do Problems 1 - 4 in class - turn in #1 and 2 for 5 pts.
- Problem #1 in Chapter 4 assigned.
September 13, 2006 Open the Economy: Exchange Rates
- Labor Market and minimum wage
- Loanable Funds Market and Government Deficits revisited
- Open Economy
- Exchange Rates
September 15, 2006 Chapter 4: The Government Budget Constraint and its
affects on the loanable funds market
- The government budget constraint
- Public saving versus private saving: how does an increase in public saving affect the
real interest rate?
- International Dimensions of Classical Theory
Week 3
September 4, 2006 LABOR DAY - No classes! Enjoy the last vacation
of summer!
September 6, 2006 Aggregate Supply and the Goods Market - WSJ Article due
- Four diagrams to get the Classical Aggregate Supply Schedule
- So WHAT determines the Aggregate Supply curve in a Classical Theoretical world?
- The Demand for Money
- Quantity Theory of Money (Irving Fisher)
- The Cambridge Equation
September 8, 2006 Real versus Nominal Interest Rates
- Aggregate Demand Schedule using the Cambridge Equation
- Price Level Determined
- Read Chapter 4
- The Real interest rate defined
- Saving and the Supply of Loanable Funds
Week 2
August 28, 2006
- For next Wed. find a macroeconomic article in the WSJ, attach a copy to a one (or so)
paragraph summary and a question that you have regarding the article (or
macroeconomics). (5 pts)
- Country homework due (See August 23)
- Nominal and Real GDP - Denoting a Base Year
- Chain-weight Real GDP?
- What's a PCE? (page 44)
- Real versus Nominal wage
- GDP broken into inflation and output growth (to be finished Wed.)
- Read Chapter 3
- Key Assumptions - Introduction to Assumption #2: Money Illusion (not fooled by nominal
variable changes)
August 30, 2006 Classical Macroeconomic Theory - Self Correcting
Mechanism First
"Revision" of 2nd Quarter GDP
- Key Assumptions -
- #1: Rational Self-Interest
- #2: Money Illusion (not fooled by nominal variable changes)
- #3: Pure Competition (P=MR)
- Production Function
- Short-run: only labor (N) changes; capital, land and entrepreneurship stay the same.
- Marginal Product of Labor
- Demand for Labor
September 1, 2006 Aggregate Demand in the Classical Theoretical World
- Real Wage versus the Nominal Wage graphically
- Supply of Labor and Equilibrium Price (or wage)
- Four diagrams to get the Classical Aggregate Supply Schedule
- So WHAT determines the Aggregate Supply curve in a Classical Theoretical world?
Week 1
August 21, 2006 Introduction to the course - Denver gas prices
- Read Chapter 1
- If you DID NOT sign up for the Wall Street Journal and
wish to, click HERE.
- Note the three Macroeconomic goals and indicators of each:
- Economic Growth - real GDP change
- Price Stability - CPI change
- Full Employment - Unemployment Rate
- Finding the indicators through my web page at various sites.
August 23, 2006 How do we measure REAL GDP, inflation and
other variables?
- Finish Chapter 1 and Read Chapter 2
- Measuring Macroeconomic Variables continued
- For Monday, August 28, 2006, for 5 points: Pick a Country
(not the U.S.)
- Find the per capita real GDP
- Price Stability Measure (CPI, GDP deflator or the like)
- Unemployment/Employment measure
- Trade balance
- Exchange rate w/U.S. today (and see if you can find a 1990 or 1995 comparison). (1
pt each)
- Two Links: BBC Country Profiles Online and CIA World Factbook
August 25, 2006 Finish Chapter 2
- Beige Book (from the FOMC through the St. Louis
Fed)
- Expenditure Approach numbers and growth rates (C + I + G + (x-m))
- Actual numbers from the BEA (see link to the left on the sidebar)
- Income Approach and reconciliation (COCA, Indirect Business Taxes, etc.)
- Balance of Payments, Private Payments Balance, Trade Balance
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email: drew at drewparkes.com
Last Update: December 06, 2006
By Andrew L. H. Parkes, Ph. D.