Principles of Macroeconomics

Course Description

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

Topics 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

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.

Class meets each Tuesdays and Thursday at 16:50 till 18:05. Please bring a hard copy of the problems we want to discuss (see below) to each class.

Laptops are banned from use during class sessions. See for the reasons.

Instructor Information:

Prof. Dr. Dennis A. V. Dittrich

You can always contact me via email. For meetings in my office appointments can be arranged through the 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 120%
Midterm Exam 220%
Final Examination60%

If the final exam is better than one or both of the midterm exams the corresponding midterm exam grade(s) 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 mark (your ability to participate in class discussions and activities) and your final exam mark.

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

Topics and Reading Assignments

Session 1 (13.02.)

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

Session 2 (15.02.)

  • 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
    Coyle, D., 2015. GDP: A brief but affectionate history. Princeton University Press.

Session 3 (20.02.)

  • GDP

Session 4 (22.02.)

  • Growth (Ch. 27 & 28, PEC: 20, 32)
    Coyle, D., 2011. The economics of enough: how to run the economy as if the future matters. Princeton University Press.
    The Economist, August 5, 2017, Human capital: The people’s champion.

Session 5 (27.02.)

  • Growth

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

Session 6 (01.03.)

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

Session 7 (06.03.)

  • Saving, Investment, & the Financial System
    Ferguson, N., 2008. The ascent of money: A financial history of the world. Penguin.

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

Session 8 (08.03.)

  • Unemployment (Ch. 30, PEC: 23)
    The Economist, August 26, 2017, The natural rate of unemployment.

Session 9 (13.03.)

  • Unemployment

Session 10 (15.03.)

Midterm Exam 1

Session 11 (20.03.)

Session 12 (22.03.)

Session 13 (27.03.)

  • Inflation

Session 14 (29.03.)

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

Session 15 (10.04.)

  • Business Fluctuations

Session 16 (12.04.)

  • 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?
    The Economist, October 27, 2016, Hands off

Session 17 (17.04.)

  • Monetary Policy

Session 18 (19.04.)

  • Monetary Policy

Session 19 (24.04.)

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

Session 20 (26.04.)

Midterm Exam 2

Session 21 (03.05.)

  • Taxes & Government Spending

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

Session 22 (08.05.)

  • Fiscal Policy (Ch. 37, PEC: 25, 28)
    The Economist, July 30, 2016, Minsky’s moment
    The Economist, August 11, 2016, Where does the buck stop?
    The Economist, September 2, 2017, Kicking the can down an endless road

Session 23 (15.05.)

  • Fiscal Policy

Session 24 (17.05.)

  • Political Economy & Public Choice (Ch. 20)

Session 25 (22.05.)

  • Political Economy & Public Choice (Ch. 20)

Session 26 (24.05.)

  • Economics, Ethics, & Public Policy (Ch. 21)
    Bentham, J., 1996. The collected works of Jeremy Bentham: An introduction to the principles of morals and legislation. Clarendon Press.
    Mill, J.S., 1901. Utilitarianism. Longmans, Green and Company.
    Rawls, J., 2009. A theory of justice. Harvard university press.
    Nozick, R., 2013. Anarchy, state, and utopia. Basic books.

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

Session 27 (31.05.)


Session 28 (05.06.)


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!]

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