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, 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 Monday 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 http://economicscience.net/content/laptop-use/ for the reasons.
Instructor Information:
Prof. Dr. Dennis A. V. Dittrich
dennis.dittrich@touroberlin.de
http://economicscience.net
My office hours are 24 hours a day via email. For meetings in my office 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.
Grading Guidelines:
Grading Component | Weight |
---|---|
Midterm Exam 1 | 20% |
Midterm Exam 2 | 20% |
Final Examination | 60% |
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.
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 (3 hours / week) | 45 hours |
Preparation and Review (4 hours / week) | 60 hours |
Topics and Reading Assignments
Session 1 (04.09.)
- Economics: The Big Ideas (Ch. 1, PEC: 1)
Session 2 (07.09.)
- 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 (11.09.)
- GDP
Session 4 (14.09.)
- 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 (18.09.)
- Growth
In “Comparative Economic Systems” we will discuss economic performance and institutions in more detail.
Session 6 (25.09.)
- Growth and
- Saving, Investment, & the Financial System (Ch. 29, PEC: 30, 26)
Session 7 (28.09.)
- 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 (02.10.)
- Unemployment (Ch. 30, PEC: 23)
The Economist, August 26, 2017, The natural rate of unemployment.
Session 9 (16.10.)
- Unemployment
Session 10 (19.10.)
Midterm Exam 1
Session 11 (23.10.)
Session 12 (26.10.)
- Money and Inflation (Ch. 31 & 34, PEC: 27)
NPR, 2011, The island of stone money: Yap
Friedman, M., 1991. The island of stone money. Hoover Institution, Stanford University.
Voxeu.org, 2017. Competition between government money and cryptocurrencies.
NPR.org., 2010. How Fake Money Saved Brazil.
Martin, F., 2014. Money: The unauthorized biography. Vintage.
Deutsche Bundesbank, 2017. How money is created.
Session 13 (30.10.)
- Inflation
Session 14 (02.11.)
- Business Fluctuations (Ch. 32 & 33, PEC: 24)
Session 15 (06.11.)
- Business Fluctuations
Session 16 (09.11.)
- 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 (13.11.)
- Monetary Policy
Session 18 (16.11.)
- Monetary Policy
Session 19 (20.11.)
Midterm Exam 2
Session 20 (27.11.)
- Taxes & Government Spending (Ch. 36, PEC: 25, 31)
Session 21 (30.11.)
- Taxes & Government Spending
In “Public Finance” we will discuss Taxes in more detail.
Session 22 (04.12.)
- 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 (07.12.)
- Fiscal Policy
Session 24 (11.12.)
- Political Economy & Public Choice (Ch. 20)
Session 25 (14.12.)
- Political Economy & Public Choice (Ch. 20)
Session 26 (18.12.)
- 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 (04.01.)
Review
Session 28 (08.01.)
Final
New Schedule for Topics and Reading Assignments
Monday sessions start at 16:50 and end at 18:05, Thursday sessions start at 12:30 and end at 15:00.
Session 7 (06.11.) 75 min
- 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 (09.11.) 75 min
- Unemployment (Ch. 30, PEC: 23)
The Economist, August 26, 2017, The natural rate of unemployment.
Session 9 (13.11.) 75 min
- Unemployment
Session 11-12 (16.11.) 150 min
- Money and Inflation (Ch. 31 & 34, PEC: 27)
NPR, 2011, The island of stone money: Yap
Friedman, M., 1991. The island of stone money. Hoover Institution, Stanford University.
Voxeu.org, 2017. Competition between government money and cryptocurrencies.
NPR.org., 2010. How Fake Money Saved Brazil.
Martin, F., 2014. Money: The unauthorized biography. Vintage.
Deutsche Bundesbank, 2017. How money is created.
Session 13 (20.11.) 75 min
- Business Fluctuations (Ch. 32 & 33, PEC: 24)
Session 14 (27.11.) 75 min
- Business Fluctuations (Ch. 32 & 33, PEC: 24)
Session 15-16 (30.11.) 150 min
- 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
Midterm Exam (04.12.)
Begin at 15:30
Session 17-18 (07.12.) 150 min
- Monetary Policy
- Taxes & Government Spending (Ch. 36, PEC: 25, 31)
Session 20 (11.12.) 75 min
- Taxes & Government Spending (Ch. 36, PEC: 25, 31)
Session 21-22 (14.12.) 150 min
- 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
In “Public Finance” we will discuss Taxes in more detail.
Session 23 (18.12.) 75 min
- Political Economy & Public Choice (Ch. 20)
Session 24-25 (21.12.) 150 min
- Political Economy & Public Choice (Ch. 20)
- Economics, Ethics, & Public Policy (Ch. 21)
Session 26 (04.01.) 75 min
- 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 (08.01.) 75 min
Review
Final Exam (11.01.)
Begin at 15:30
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!