SYLLABUS: ECON 101b: MACROEONOMICS: FALL 2006

SYLLABUS: ECON 101b: MACROEONOMICS: FALL 2006

Brad DeLong delong@econ.berkeley.edu Office Hours: T 12-2 Evans 601, or by appointment http://www.j-bradford-delong.net/

Joe Rosenberg jwr_econ@berkeley.edu Office Hours: F 9-1 TBA

Lecture Meets: TTh 2-3:30, 70 Evans
Sections Meet: MW 9-10 47 Evans, WF 11-12, 51 Evans
Course Website: http://berkeley101bfall2006.vox.com/

This is the syllabus for Economics 101b, Macroeconomics. It carries the course up until November 7. The syllabus for the rest of the course will be distributed later, and will depend on (a) how the class goes in September and October, and (b) what the currently "hot topics" in the economic news happen to be. The possibility of an American or global recession, the U.S. budget deficit, the looming possibility of a major U.S. dollar-financial crisis, the dilemmas of Federal Reserve policy, and the ongoing industrial revolutions in East and South Asia will certainly be on the second-half syllabus, but there will be other topics as well.

This is the go-faster and do-more version of macroeconomics--the study of the determination of output, production, income, employment, and prices in the economy as a whole.

TEXTBOOK

One book is required:

1. The intermediate macroeconomics textbook is the one that Brad DeLong and Marty Olney have written. DeLong and Olney (2005), Macroeconomics 2nd ed. (New York: McGraw-Hill/Irwin) http://www.amazon.com/exec/obidos/asin/0072877588/braddelong00. Here is our explanation of why we wrote it the way we did: http://www.j-bradford-delong.net/Teaching_Folder/manifesto.html

Other things you might want to look at:

1. The Economic Report of the President, available online at http://w3.access.gpo.gov/eop/, for the U.S. government's view of the state of the economy.

2. For recent economic data, the CEA-JEC _Monthly Economic Indicators http://www.access.gpo.gov/congress/eibrowse/broecind.html.

3. Robert Heilbroner's The Worldly Philosophers (New York: Touchstone) http://www.amazon.com/exec/obidos/asin/068486214X/braddelong00.

4. Alan Blinder and Janet Yellen's (2001) The Fabulous Decade (New York: Century Foundation) http://www.amazon.com/exec/obidos/asin/0870784676/braddelong00.

5. Various intelligent and readable weblogs by economists: Greg Mankiw, Tyler Cowen and Alex Tabarrok, Mark Thoma, Jim Hamilton and Menzie Chinn, Brad Setser, Max Sawicky, Dean Baker, the Economic Policy Institute

If you want alternative takes at the subject matter, let me recommend two alternative textbooks: Greg Mankiw's Macroeconomics- http://www.amazon.com/exec/obidos/ASIN/0716762137/braddelong00, and Olivier Blanchard's _Macroeconomics http://www.amazon.com/exec/obidos/ASIN/0131860267/bradelong00. Olivier covers an extraordinary amount of ground at a conceptually (but not mathematically) very sophisticated level. His book is the best introductory macro book for those who can follow it. Greg is a brilliant and thoughtful man who is better than anybody else at making his point of view on economics seem natural and inevitable logical truths. Certainly the clearest introductory macro book.

GO-FASTER, DO MORE

Since this is a go-faster do-more course, we will go faster and do more. As a group, the class will be made up of people comfortable using calculus, so we'll feel free to use it in lectures, handouts, and in problem sets (and on exams). If you aren't comfortable using calculus, you probably don't belong here and may well not have a good time.

We will do a lot of things that are not in the book.

WEB

Since we will do a lot of things that are not in the book, I will need a place to put them. As some of you know, for the past decade I have been thrashing around, trying to figure out how to use modern electronic computer and communications technologies to supercharge education. The thrashing continues. This year's thrash will be to put the course website at:

http://berkeley101bfall2006.vox.com

More about this later...

GRADES

We are keenly aware that almost everybody signing up for this course could alternatively take and do very well in Economics 100b. We are anxious not to have students vote with their feet for an easier course and learn less because they fear the consequences of lowering their grade point average. Therefore this course will have a high curve: the idea is that nobody should get a lower grade than they would have gotten had they decided to take Economics 100b.

Grades will be based on the following:

• 20% from a first Midterm Exam to be given Wednesday September 28. (This is really early to give a midterm. Nevertheless it is important to give a midterm exam early in the course to serve as a reality check: so that students in trouble can figure out how much trouble they are in, and also--more important--so that at least one of us (DeLong) can figure out how unrealistic and detached from reality his beliefs about his teaching effectiveness are.)
• 20% from a second Midterm Exam to be given October 19.
• 20% from a (short: two hours long) Final Exam to be given December 13.
• 20% from Problem Sets. Problem Sets will be graded either 0 points (didn't hand it in on time), 1 point (handed it in but didn't make much of a successful effort) to complete it, and 2 points (made an effort--largely successful--to solve the problems).
• 10% from a five-page paper due
• 10% from section participation.

No makeup exams will be offered. Students who miss one of the three exams will have their scores for the other exams reweighted to add up to 60%. Students who miss two of the three exams should not expect to pass the course.

Since this is a go-faster and do-more course,

T Aug 29: INTRODUCTION: The Problems of Macroeconomics [Background reading: Macroeconomics, chs. 1-3]

Th Aug 31: THE LONG RUN: ECONOMIC GROWTH: Model-Building [Reading: Macroeconomics, ch. 4]

T Sep 5: THE LONG RUN: ECONOMIC GROWTH: Model-Building: Capital and Equilibrim

Th Sep 7: THE LONG RUN: ECONOMIC GROWTH: Model-Building: Dynamics and Feedback

T Sep 12: THE LONG RUN: ECONOMIC GROWTH: Application: How Much of the World Can We Explain? [Reading: Macroeconomics, ch. 5]

Th Sep 14: THE LONG RUN: ECONOMIC GROWTH: Model-Building: Technology and Organization

T Sep 19: THE LONG RUN: ECONOMIC GROWTH: Application: Technology, Organization, and Political Economy

Th Sep 21: FIRST MIDTERM EXAM ("Professorial Reality Check" Exam)

T Sep 26: THE MEDIUM RUN: Introduction: Full Employment, Flexible Prices, and Accurate Expectations [Reading: Macroeconomics, ch. 6]

Th Sep 28: THE MEDIUM RUN: The Real Side: Model-Building: Components of Aggregate Demand

T Oct 3: THE MEDIUM RUN: Model-Building: Full-Employment Equilibrium [Reading: Macroeconomics, ch. 7]

Th Oct 5: THE MEDIUM RUN: The Real Side: Application: Government Surpluses, Government Deficits, Investment Booms

T Oct 10: THE MEDIUM RUN: The Real Side: Application: The International Side: Exchange Rates, Net Exports, and Sectoral Shifts

Th Oct 12: THE MEDIUM RUN: The Monetary Side: The Quantity Theory of Money [Reading: Macroeconomics, ch. 8]

T Oct 17: THE MEDIUM RUN: The Monetary Side: Inflation and Expectations

Th Oct 19: SECOND MIDTERM EXAM ("Medium Run" Exam)

T Oct 24: THE SHORT RUN: Business Cycles: Model-Building: Sticky Prices and Aggregate Demand [Reading: Macroeconomics, ch. 9]

Th Oct 26: THE SHORT RUN: Business Cycles: Model-Building: The IS Curve and Employment [Reading: Macroeconomics, ch. 10]

T Oct 31: THE SHORT RUN: Business Cycles: ApplIcation: Stabilization Policy since WWII

Th Nov 2: THE SHORT RUN: Business Cycles: Model-Building: The Phillips Curve and Inflation [Reading: Macroeconomics, ch. 12]

T Nov 7: CONCLUSION: Business Cycles: Model-Building: Tying Up the Short-Run and the Medium Run

Th Nov 9:

T Nov 14:

Th Nov 16:

T Nov 21: NO CLASS

T Nov 28:

Th Nov 30:

T Dec 5:

Th Dec 7: FINAL REVIEW

W Dec 13: FINAL EXAM 12:30-3:30