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
Required:
The course will follow the textbook: Cowen & Tabarrok,
2020, Modern Principles of Economics, 5th edition, Worth Publishers.
Available from amazon.
The mandatory reading asignments listed below include pre-recorded short video lectures on the corresponding topics as we will follow a flipped classroom approach.
Further recommendations:
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
To prepare for 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 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.
Instructor Information:
Prof. Dr. Dennis A. V. Dittrich
dennis.dittrich@touroberlin.de
http://economicscience.net
Twitter: @davdittrich
You can always contact me via email or twitter. For meetings appointments can be arranged through the my webpage at: https://economicscience.net/appointments/
Updated information, links to the literature, additional materials, etc. can be found on my webpage as well.
Grading Guidelines:
Grading Component | Weight |
---|---|
Quizzes | 30% |
Problem Sets | 70% |
Workload
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.
Activity | Time |
---|---|
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
Session 1
Economics: The Big Ideas (Ch. 1, PEC: 1)
Video: Introduction to Economics
Session 2
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 GDPrecommended:
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.
The Economist, May 30, 2020, Crisis measures.
Alexander Tziamalis, February 13, 2018, Why our obsession with GDP ignores harm done to welfare and the world.Coyle, D., 2015. GDP: A brief but affectionate history. Princeton University Press.
Coyle, D., 2019. GDP: What Will Succeed GDP? Project Syndicate.
Session 3
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 Growthrecommended:
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
Video: The best stats you’ve ever seen
Video: Why the world needs charter cities
Session 4
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 Equationrecommended:
The Economist, August 15, 2020, Club class.
The Economist, December 8, 2020, Reasons to be cheerful.
Video: How Ideas Trump Crises
In “Comparative Economic Systems” we will discuss economic performance and institutions in more detail.
Session 5
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: Bonds
Video: Four Reasons Financial Intermediaries Fail
Video: The Great Recessionrecommended:
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.
Session 6
Saving, Investment, & the Financial System continued (Ch. 29, PEC: 30, 26)
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?recommended:
The Economist, August 15, 2020, What harm do minimum wages do?
Session 7
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?recommended:
The Economist, August 26, 2017, The natural rate of unemployment.
The Economist, June 16, 2020, Spending to save jobs.
The Economist, October 29, 2020, The zombification of Britain.
Session 8
Money (PEC: 27)
Video: What is money?
Video: Fiat Money vs. the Gold Standardrecommended:
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 Inflationrecommended:
Video: Scrooge McDuck and Money
Video: DuckTales Dough Ray Me
NPR.org., 2010. How Fake Money Saved Brazil.
Session 9
Inflation and the Quantity Theory of Money (Ch. 31)
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 Modelrecommended:
Video: The Keynesians
Video: The Monetarists
Video: Real Business Cycle
Video: The Austrians
Video: The Great Recession
Session 10
Business Fluctuations (Ch. 32 & 33, PEC: 24)
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 Muchrecommended:
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.
The Economist November 21, 2020, Changing down.
The Economist December 12, 2020, Prognostication and prophecy.
Session 11
Monetary Policy (Ch. 34 & 35, PEC: 27, 28)
Taxes & Government Spending (Ch. 36, PEC: 25, 31)
In “Public Finance” we will discuss Taxes in more detail.
Session 12
Taxes & Government Spending (Ch. 36, PEC: 25, 31)
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?recommended:
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.
The Economist, October 29, 2020, The notorious GDP.
St. Louis Fed, December 4, 2020, Does The National Debt Matter?
Session 13
Fiscal Policy (Ch. 37, PEC: 25, 28)
Public Goods (Ch. 19, PEC: 14)
Video: Public Goods and Asteroid Defense
Video: A Deeper Look at Public Goods
Video: Club Goods
Video: The Tragedy of the Commonsrecommended:
The Economist, October 29, 2020, Have your hake and eat it.
Session 14
Political Economy & Public Choice (Ch. 20)
Economics, Ethics, & Public Policy (Ch. 21, PEC: 11)
recommended:
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.
Problem sets
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!