Principles of Macroeconomics
preliminary — subject to changes
- December 2nd
- No class
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.
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.
The course will follow the textbook: Cowen & Tabarrok,
2015, Modern Principles of Economics, 3rd edition, Worth Publishers.
Available from amazon. You can also get the newer 4th edition on amazon, the chapter numbers may, however, differ to those given below.
The mandatory reading asignments listed below include pre-recorded short video lectures on the corresponding topics as we will follow a flipped classroom approach.
Additionally, material from the following text will be used:
Goodwin et. al., 2014, Principles of Economics in Context, Routledge.
Available from amazon.
Relevant chapters are listed below as [PEC:Chapter number].
The Cartoon Introduction to Economics: Volume Two: Macroeconomics by Grady Klein / Yoram Bauman, Macmillan
Students must read the corresponding chapters of the textbook and watch the pre-recorded lecture video clips before each session. Reading the economic and political press will also be helpful.
Only watching the video clips will not be sufficient. I recommend that you try to solve the end of chapter problems in preparation and review of each class session.
You can always contact me via email or twitter. For meetings appointments can be arranged through the my webpage at: http://economicscience.net/content/book-appointment.
Updated information, links to the literature, additional materials, etc. can be found on my webpage as well.
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 and Preparation (4 hours / week)||60 hours|
|Problem Sets and Review (3 hours / week)||45 hours|
Topics and Reading Assignments
GDP (Ch. 26, PEC: 0, 1, 19, 20, 21)
Video: What Is Gross Domestic Product
Video: Nominal vs. Real GDP
Video: Real GDP Per Capita and the Standard of Living
Video: Splitting GDP
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.
The Economist, May 3, 2018, The worth of nations.
Alexander Tziamalis, February 13, 2018, Why our obsession with GDP ignores harm done to welfare and the world.
Growth (Ch. 27, PEC: 20, 32)
Video: Basic Facts of Wealth
Video: Growth Rates Are Crucial
Video: An Orgy of Innovation
Video: Growth Miracles and Growth Disasters
Video: The Importance of Institutions
Video: Geography and Economic Growth
Video: The Puzzle of Growth
Coyle, D., 2011. The economics of enough: how to run the economy as if the future matters. Princeton University Press.
Roser, M., 2013. Economic Growth. Published online at OurWorldInData.org.
The Economist, August 5, 2017, Human capital: The people’s champion.
The Economist, September 12, 2020, Whose land?
The Economist, September 12, 2020, Parcels, plots and power
Video: The Economic History of the World in Less than 5 Minutes
Video: The Hockey Stick of Human Prosperity
Video: Africa Is the Most Landlocked Continent
Video: The Magic Washing Machine
Video: Why Are So Many Poor Countries Located Close to the Equator?
Video: New Report Reveals Where You Live and Work Affects Your Economic Mobility
Growth (Ch. 28)
Video: Introduction to the Solow Model
Video: Physical Capital and Diminishing Returns
Video: The Solow Model and the Steady State
Video: The Solow Model
Video: Human Capital and Conditional Convergence
Video: The Solow Model and Ideas
Video: The Solow Model: Investments vs. Ideas
Video: The Economics of Ideas
Video: Patents, Prizes, and Subsidies
Video: The Idea Equation
In “Comparative Economic Systems” we will discuss economic performance and institutions in more detail.
Personal Finance (Ch. 23)
Video: The Miracle of Compound Returns
Video: How Expert Are Expert Stock Pickers?
Video: Can You Beat the Market?
Video: Investing: Why You Should Diversify
Video: Who Is More Rational? You or the Market?
Video: Rent or Buy?
Saving, Investment, & the Financial System (Ch. 29, PEC: 30, 26)
Video: Saving and Borrowing
Video: What Do Banks Do?
Video: Intro to Stock Markets
Video: Intro to the Bond Market
Video: Four Reasons Financial Intermediaries Fail
Video: The Great Recession
Ferguson, N., 2008. The ascent of money: A financial history of the world. Penguin.
Kabil, A., 2018. How Warren Buffett Won His Multi-Million Dollar Long Bet
The Ecomomist, February 3, 2018, Negative justice.
The Ecomomist, July 25, 2020, Putting capital into capitalism.
Video: The ascent of money
In “Principles of Finance” we will discuss these topics in more detail.
Labor Markets (Ch. 18, PEC: 10)
Video: The Marginal Product of Labor
Video: Is Education Signaling or Skill Building?
Video: Human Capital and Signaling
Video: The Tradeoff Between Fun and Wages
Video: Compensating Differentials
Video: Do Unions Raise Wages?
Unemployment (Ch. 30, PEC: 23)
Video: The Economics of Choosing the Right Career
Video: Defining the Unemployment Rate
Video: Is Unemployment Undercounted?
Video: Frictional Unemployment
Video: Structural Unemployment
Video: Cyclical Unemployment
Video: Labor Force Participation
Video: Taxing Work
Video: Women Working: What’s the Pill Got to Do With It?
NPR, 2011, The island of stone money: Yap
Friedman, M., 1991. The island of stone money. Hoover Institution, Stanford University.
Martin, F., 2014. Money: The unauthorized biography. Vintage.
Graeber, D., 2014. Debt – Updated and Expanded: The First 5,000 Years. Melville House.
Voxeu.org, 2017. Competition between government money and cryptocurrencies.
Bower, B., 2018. Money’s mysterious, complicated origin story. Science News.
Inflation and the Quantity Theory of Money (Ch. 31)
Video: Zimbabwe and Hyperinflation: Who Wants to Be a Trillionaire?
Video: Measuring Inflation
Video: Causes of Inflation
Video: Costs of Inflation: Price Confusion and Money Illusion
Video: Costs of Inflation: Financial Intermediation Failure
Video: Costs of Inflation
Video: Why Governments Create Inflation
NPR.org., 2010. How Fake Money Saved Brazil.
Business Fluctuations (Ch. 32 & 33, PEC: 24)
Video: Intro to Business Fluctuations
Video: The Aggregate Demand Curve
Video: The Long-Run Aggregate Supply Curve
Video: Sticky Wages
Video: The Short-Run Aggregate Supply Curve
Video: Changes in Velocity
Video: Understanding the Great Depression
Video: Using the AD-AS Model
Video: Multiple Shocks with the AD-AS Model
The Central Bank & Monetary Policy (Ch. 34 & 35, PEC: 27, 28)
Video: Monetary Policy and the Fed
Video: The Money Multiplier
Video: How the Fed Worked: Before the Great Recession
Video: How the Fed Works: After the Great Recession
Video: The Federal Reserve as Lender of Last Resort
Video: Monetary Policy: The Best Case Scenario
Video: Monetary Policy: The Negative Real Shock Dilemma
Video: When the Fed Does Too Much
McLeay, M., Radia, A. and Thomas, R., 2014. Money creation in the modern economy, Bank of England Quarterly Bulletin.
Deutsche Bundesbank, 2017. How money is created.
The Economist, 20th February 2016, Unfamiliar ways forward
The Economist, October 27, 2016, Hands off.
The Economist June 18, 2020, From yields to maturity.
The Economist August 15, 2020, Conscious uncoupling.
- Taxes & Government Spending (Ch. 36, PEC: 25, 31)
In “Public Finance” we will discuss Taxes in more detail.
Fiscal Policy (Ch. 37, PEC: 25, 28)
Video: Introduction to Fiscal Policy
Video: Fiscal Policy: The Best Case Scenario
Video: The Limits of Fiscal Policy
Video: The Dangers of Fiscal Policy
Video: Fiscal Policy and Crowding Out
Video: Does Fiscal Policy Work?
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
The Economist, July 25, 2020, Starting over agin.
Political Economy & Public Choice (Ch. 20)
Economics, Ethics, & Public Policy (Ch. 21, PEC: 11)
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.
Topics and reading assignments are subject to changes.
We will discuss problems – mostly taken from our textbook – in class. You will find the problems for download in a pCloud folder. [Click Here!]
Upload you solutions to this pCloud folder [Click Here!] Please use PDF or plain text for your uploads.
If you do not have a pCloud account yet: Get one for free!