Principles of Macroeconomics

This version:

subject to changes

Course Description

An introductory course covering issues relating to the economy as a whole.

Topics discussed include, but are not limited to, the study of national income and the Gross Domestic Product (GDP), national income determination, investment, consumption and consumption theories; classical economic theories, Keynesianism, monetarism, rational expectations, supply-side economics; the business cycle, inflation, unemployment; money and the money supply, the banking system, monetary and fiscal policy, budget deficits and the national debt.

Course Objectives

The course will enable students to gain an understanding of how the market economy works and how economic theory can be used to understand issues of public policy and public finance.

Course Materials


The course will follow the textbook: Cowen & Tabarrok, 2015, Modern Principles of Economics, 3rd edition, Worth Publishers.
Available from bookdepository and amazon

The required readings from this textbook are listed below.

Further recommendations:

Additionally, material from the following text may be used:
Goodwin et. al., 2014, Principles of Economics in Context, Routledge.
Available from amazon and bookdepository.
Relevant chapters are listed below as [PEC:Chapter number].

The Cartoon Introduction to Economics: Volume Two: Macroeconomics by Grady Klein / Yoram Bauman, Macmillan

To prepare for the exams, Schaum’s Outlines of Principles of Economics offers a huge number of fully solved problems.
Available from amazon or bookdepository

Course Requirements:

Students must read the corresponding chapters of the textbook before each session. Reading the economic and political press will also be helpful.

I recommend that you try to solve the end of chapter problems in preparation and review of each class session.

Instructor Information:

Prof. Dr. Dennis A. V. Dittrich

You can always reach me via email. For meetings in my office appointments can be arranged through my webpage at:

Updated information, links to the literature, additional materials, etc. can be found on my webpage as well.

Grading Guidelines:

Grading ComponentWeight
Midterm Exam 130%
Midterm Exam 230%
Final Examination40%

If the final exam is better than one or both of the midterm exams the worst midterm exam grade will be replaced by the grade of the final exam.


A typical 3 credit course requires 150 hours of your time. The table below identifies how I expect those 150 hours will be allocated. While you do not receive direct marks for reading, reading will affect your class participation (your ability to participate in class discussions and activities) and your final exam mark. While some weeks have more readings than others, you should be able to read the required reading in an average of 2 hours per week.

Class Time (3 hours / week)45 hours
Reading (3 hours / week)45 hours
Preparation and Review (4 hours / week)60 hours

Weekly Topics and Reading Assignments

Session 1:

Economics: The Big Ideas (Ch. 1, PEC: 1)

Session 2:

GDP (Ch. 26, PEC: 0, 1, 19, 20, 21)

The New Yorker, SEPTEMBER 9, 2015, The End of GDP?
The Economist, April 30, 2016, The trouble with GDP
The Economist, April 30, 2016, How to measure prosperity

Session 3:

Growth (Ch. 27 & 28, PEC: 20, 32)

In “Comparative Economic Systems” we will discuss economic performance and institutions in more detail.

Session 4:

Growth (Ch. 28) and
Saving, Investment, & the Financial System (Ch. 29, PEC: 30, 26)

In “Principles of Finance” we will discuss these topics in more detail.

Session 5:

Midterm Exam 1

Session 6:

Unemployment (Ch. 30, PEC: 23)

Session 7:

Inflation (Ch. 31 & 34, PEC: 27)

Stone Money

NPR, 2011, The island of stone money: Yap
Friedman, M., 1991. The island of stone money. Hoover Institution, Stanford University.

Session 8:

Business Fluctuations (Ch. 32 & 33, PEC: 24)

Session 9:

The Central Bank & Monetary Policy (Ch. 34 & 35, PEC: 27, 28)

The Economist, 20th February 2016, Unfamiliar ways forward
The Economist, 20th February 2016, Out of ammo?

Session 10:

Midterm Exam 2

Session 11:

Taxes & Government Spending (Ch. 36, PEC: 25, 31)

In “Public Finance” we will discuss Taxes in more detail.

Some Figures on Taxes

Session 12:

Fiscal Policy (Ch. 37, PEC: 25, 28)

The Economist, 20th February 2016, Unfamiliar ways forward
The Economist, 20th February 2016, Out of ammo?

Session 13:

Political Economy & Public Choice (Ch. 20)

Session 14:

Economics, Ethics, & Public Policy (Ch. 21)

In “Public Finance” we will discuss the role of Government in the Economy, Taxes, Public Choice, and Public Policy in more detail.

Session 15:


Topics and reading assignments are subject to changes.

Problem sets

We will discuss problems – mostly taken from our textbook – in class. You will find the problems for download in a dropbox folder. [Click Here!]

If you do not have a Dropbox account yet: Get one for free!