ECON 3080-003 Intermediate Macroeconomic Theory

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ECON 3080-003 Intermediate Macroeconomic Theory
ECON 3080-003
Intermediate Macroeconomic Theory, Fall 2013
Office Hours:
Joseph Vavrus
[email protected] (preferred contact method)
ECON 309c (3rd floor of the Economics building)
Tues/Thurs 2:00-3:00 p.m. and by appointment.
TuTh: 3:30-4:45, Aug 27-Dec 12, ECON 119
Course Overview
Macroeconomics is the study of the aggregate (macro) economy. The course is roughly divided into two parts. First, we
will learn tools to analyze long-run patterns of economic growth, labor markets, and price changes. Next, we will deal
with the short-run and discuss monetary policy, fiscal policy, and how they relate to current economic issues.
In general, we will be using many simple equations to build “toy models” of the economy. By playing with these, we can
gain deeper intuition into the highly complex economic interactions that create real problems and benefits for people
worldwide. Some of the most important national and international political issues concern the potential costs and
benefits of economic policy (in)action. While these models don’t give easy, perfect answers, from them you will have a
stronger understanding of the mechanisms and chains of causality that underlie these issues.
1. ECON 1000 or ECON 2020 or equivalent from another institution
2. ECON 1078 and 1088, or MATH 1300, or MATH 1310, or MATH 1081, or MATH 1080, 1090 and 1100, or APPM
1350, or equivalent from another institution
The toy models we will be using require basic calculus and algebra. The math is not highly advanced, but it is a consistent
part of the course. Additionally, much of this course applies the economic intuition you will have learned in your
principles courses. If you have any concerns about your mathematic/economic preparation for this course, please come
talk with me ASAP and we can discuss whether this class is right for you.
Required text: Charles I. Jones (2011). Macroeconomics, W. W. Norton & Company, 2nd Edition.
You are welcome to use any other editions of this book; however you may need to come to office hours or consult a
classmate with the 2nd edition to determine how the chapters line up. If I assign any problems directly from the
textbook, I will reproduce them in full.
Optional: Robert L. Heilbroner. The Worldly Philosophers.
Any edition is fine. I will discuss this under policy project.
Additional: Some of the tools we use will occasionally feel a bit divorced from the real policy debates that are
happening. One thing to reconnect you is to keep abreast of current economic news in the Financial Times, the Wall
Street Journal, the Economist, etc. I highly recommend doing so; this will make the course much richer for you. (It is also
necessary to successfully do your project!) Additionally, I recommend Mark Thoma’s blog
http://economistsview.typepad.com/. Along with his own writings, Professor Thoma links to many blog posts and
articles on debates both about macroeconomics and how macroeconomics should be practiced.
Grading Policies
Your final grade will be weighted as follows:
Midterm 1 20% Thursday, October 3
Midterm 2 20% Thursday, November 7
Final 25% Wednesday, December 18, 1:30 p.m. – 4:00 p.m.
Problem sets 15% Due dates in lecture schedule
Participation/Attendance 5%
Project 15% Due July 3 at 5pm.
Midterms and Final:
Together these count for the bulk of your grade. I will not give makeup exams or early exams except for the exception
listed below. If you have a documented emergency that precludes you from taking an exam on the given date the other
final will be weighted at 45%. You will receive a 0 for any exams you miss without a documented excuse. Cell phone
calculators are not allowed under any circumstances for exams. Other calculators are fine and should be brought with
If you have three or more final exams scheduled on the same day, you are entitled to arrange an alternative exam time
for the last exam or exams scheduled on that day. Also, if you have two final exams scheduled to meet at the same time
you are entitle to arrange an alternative examination time for the later course. To qualify for rescheduling final exam
times, you must provide evidence that you have three or more exams on the same day or two exams meeting at the
same time, and arrangements must be made with your instructor no later than the end of the sixth week of the
semester (Friday, October 4, 2013).
Lectures and participation:
Students benefit from attending class, therefore there will be a small participation grade to incentivize you to come.
Every now and then I will take attendance (either through an in-class assignment or a written prompt of some kind) or
call on students randomly to answer questions when there is a lull. You may miss a total of two lectures without any
penalty, missing any more than that would require an excuse for having missed all three, four, etc.
A tentative lecture schedule is below. All exam dates and due dates are set. Topic dates and chapters are subject to
To do
Topic 1 – Long-run growth
Week of Aug 27
Intro and Math review
Jones 1 & 2
Week of Sep 3
Growth basics and production
Jones 3&4
Week of Sep 10
Production and Solow
Jones 4&5 PS 1 due Sep 13
Week of Sep 17
Solow and Romer
Jones 5&6
Week of Sep 24
Romer Model
Jones 6
Week of Oct 1
Review and Midterm
PS 2 due Oct. 1
Midterm 1 Oct. 3
Topic 2 – Transitioning from the long-run to the short-run
Week of Oct 8
Labor markets and inflation
Jones 7&8, Project check-in Oct.
Week of Oct 15
The short-run model and IS
Jones Ch. 9 and 11
Week of Oct. 22
Phillips Curve/Monetary policy
Jones 12, PS3 due Oct. 24
Week of Oct. 29
AS/AD Model
Jones 13
Week of Nov. 5
Review and Midterm
PS 4 due Nov. 5
Midterm 2 Nov. 7
Topic 3 – Applications, policy extensions, and the open-economy
Week of Nov. 12
Government and fiscal policy
Jones 17, previous chapters
Week of Nov. 19
The Great Recession
Jones 10 & 14, previous
Week of Nov. 26
Week of Dec. 3
Open-economy chapters, extra topics etc, time permitting.
Policy project due Dec 12 by
Week of Dec. 10
Final review/catch up
Final exam: Wed. Dec 18 1:30 p.m. –
4:00 p.m.
Problem Sets:
There will be four problem sets assigned over the term. These will include questions similar in style and difficulty as
what will be on the three tests. You may work in groups, but I want a separate assignment turned in by every student.
On the date they are due, you must turn them in at the beginning of class. I do not accept late problem sets – especially
because I often post solutions immediately after they are turned in! These will be graded mostly on completion, but I
will be sure to grade some of the most important parts/questions for accuracy.
Policy Project:
For this project I want you to think outside the text. First, find a newspaper article or blog post in the last couple of years
(the more recent the better) on an economic policy issue that interests you. See the readings list for ideas of where to
look. Next, I want you to choose an important economic thinker and relate his or her ideas to the economic policy issue.
This should be about 2-5 pages single spaced. I included Heilbroner’s Worldly Philosophers as an optional text to help
with this project. You may choose one of the economists that he discusses or another subject to my approval. Nobelprize winning economists are also good candidates. I will post more details on desire to learn. I need to approve your
project by October 10. Your final project is due July 3 by 5pm. You will lose 5% of your total project points per day if you
are late on either project deadline.
Desire To Learn:
All course materials including this syllabus, problem sets, project details, additional readings, etc. will be posted at
University Policies
Disability Policy –
If you qualify for accommodations because of a disability, please submit a letter from Disability Services to me in a
timely manner so that your needs may be addressed. Disability Services determines accommodations based on
documented disabilities. Contact: 303-492-8671, Willard 322, and http://www.Colorado.EDU/disabilityservices
Religious Observance Policy –
Campus policy regarding religious observances requires that faculty make every effort reasonably and fairly deal with all
students who, because of religious obligations, have conflicts with scheduled exams, assignments, or required
attendance. If you have a conflict, please contact me at the beginning of the semester so we can make proper
Code of Behavior Policy –
Students and faculty each have responsibility for maintaining an appropriate learning environment. Students who fail to
adhere to such behavioral standards may be subject to discipline. Faculty have the professional responsibility to treat all
students with understanding, dignity, and respect to guide classroom discussion and to set reasonable limits on the
manner in which they and their students express opinions. Professional courtesy and sensitivity are especially important
with respect to individuals and topics dealing with differences of race, culture, religion, politics, sexual orientation,
gender variance, and nationalities. Class rosters are provided to the instructor with the student’s legal name. I will
gladly honor your request to address you by an alternate name or gender pronoun. Please advise me of this preference
early in the semester so that I may make the appropriate changes to my records.
Honor Code –
All students of the University of Colorado at Boulder are responsible for knowing and adhering to the academic integrity
policy of this institution. Violations of this policy may include: cheating, plagiarism, aid of academic dishonesty,
fabrication, lying, bribery, and threatening behavior. All incidents of academic misconduct shall be reported to the
Honor Code Council ([email protected]: 303-725-2273). Students who are found to be in violation of the academic
integrity policy will be subject to both academic sanctions from the faculty member and non-academic sanctions
(including but not limited to university probation, suspension, or expulsion). Other information on the Honor Code can
be found at http://www.colorado.edu/policies/honor.html and at http://www.colorado.edu/academics/honorcode
Discrimination and Harassment Policy –
(http://www.colorado.edu/policies/discrimination.html, the University of Colorado policy on Sexual Harassment, and
the University of Colorado policy on Amorous Relationships applies to all students, staff, and faculty. Any student, staff,
or faculty member who believes s/he has been the subject of discrimination or harassment based upon race, color,
national origin, sex, age, disability, religion, sexual orientation, or veteran status should contact the Office of
Discrimination and Harassment (ODH) at 303-492-2127 or the Office of Judicial Affairs at 303-492-5550. Information
about the ODH and the campus resources available to assist individuals regarding discrimination or harassment can be
obtained at http://www.colorado.edu/odh.
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